Uzbekistan


Bridging the Panj River

 

U.S. 'R' US: Bridging the Panj River

 

Joshua Foust over at Registan has weighed in on the Manas air base saga, but I feel he may have wandered into some factual and analytical inexactitudes that I wanted to raise here for the conscientious Central Asia observer.

The most interesting point has to do with the apparent revelation in an Associated Press report that the Pentagon intends to resume “military cooperation” with Uzbekistan. Foust scoffs at the suggestion that this is a novel revelation, but I think that is a mistake.

The suggestion that the U.S. is trying improve military ties with Uzbekistan is indeed news, if it is actually true. Any negotiations we are so far aware of have focused on using the country as a transit point for non-military goods, such as food, building material and medical supplies. Military cooperation would entail engagement of quite a different order and could indeed raise ethical questions, if you are the kind of person that asks them.

My issue with the report is that rings decidedly false, and I would not be surprised if this is the United States military’s attempt to play its own card in the now-desperate information war it is waging with Kyrgyzstan; an attempt to scare Bishkek into desisting from overplaying its poker hand in the bid for extra money, which is clearly how Washington views this whole affaire.

Again, the story just doesn’t seem very likely, for a number of reasons. While there has been some rapprochement between the U.S. and Uzbekistan, it has been slow and pretty low-key. Resurrecting the K2 base is probably never likely to be on the agenda in Karimov’s lifetime for any number of reasons. Also, Uzbekistan looks as though it is prepared to commit to its membership in the CSTO _ the fact that Karimov deigned to go the body’s summit in Moscow is a rare concession that should not be underestimated.

Foust is also wrong in saying that March 2008 marked a turning point in that the Uzbeks allowed NATO countries to resupply from Termez. The Germans have been using that as a supply facility since coalition operations began in Afghanistan. What Robert Simmons said in Moscow last year was that U.S. personnel were travelling through a facility in Uzbekistan _ though he never actually mentioned Termez by name, contrary to what was claimed by some Russian news reports. All in all, it was a fundamentally pretty trivial development, regardless of what the media reports may have suggested.

It might also be nitpicking to question whether the United States thought (or thinks) Uzbekistan is the only choice for transit, but here goes. What is becoming clear is that the policy is now to pursue multiple routes, for the simple reason that it undermines attempts by any single rogue state from making a nuisance of itself.

Foust says Uzbekistan has the only high-capacity border crossing into Afghanistan, meaning the misnamed Bridge of Friendship. That is an assertion easily made if you have never tried crossing the bastard thing, but I know what he means.

However, the United States is clearly intent on making further use of Tajikistan in the future, which explains why they are in talks with authorities there to fund the building of yet another bridge to match the spiffy one across the Panj River that they already paid for a few years back. While there could be no talk getting there from Europe overland, which would either take you through Uzbekistan anyway or go via some hellishly winding and bumpy roads, there is always the option of sourcing goods locally. This is something U.S. diplomats have already spoken about doing in Kazakhstan, and there is no reason the approach could not be used elsewhere _ it would after all be a useful economic boost for particularly poverty-stricken areas like southern Tajikistan.

It is also glib to dismiss efforts to engage Turkmenistan’s role to play. At least the U.S. military thinks so; or General David Petraeus, CENTCOM commander, would not have bothered going there last month with the express intent of discussing how Ashgabat could assist operations on Afghanistan. On paper, Turkmenistan has said it is interested in helping stability in Afghanistan, and given its insistence on the neutrality formula, that could really only possibly mean assisting in transportation arrangement for non-military supplies.

Again, a lot of people seem to labouring under some kind of misapprehension about what these transit routes are all about exactly. It is not even clear that any military personnel will even be engaged in moving these goods from point A to point B, until they get to the Afghan border. It is, after all, almost certainly cheaper to contract these logistical services to private companies, which helpfully obviates cause for concern among any of the affected states that the operation would in any way be impinging on their diplomatic and strategic status.

On one point I am still just about in agreement with Foust, though I may in time have to eat many of the words I spent on my previous post. It is clear to any fool with eyes that Kyrgyz President Kurmanbek Bakiyev is angling for money. That fact alone lets in the slightest chink of light into the gloom, if you are someone that believes Manas air base should stay put. The United States, though, have clearly not been very forthcoming on this matter, a fact that must frustrate Kyrgyzstan more than somewhat.

Even so, they have allowed some slight room for a demarche. In spite of government officials harping on endlessly about how it is the end of the road for Manas, the parliamentary vote on a government-sponsored draft bill to revoke the basing agreement has been delayed till at least Thursday, while deputies really chew it over, at the urging of the government itself no less.

This is patently a lot of hogwash. The bill is a work of febrile stupidity even by Kyrgyz parliamentary standards. Although it is true that Manas has been in situ far longer than most Kyrgyz people could have expected, it is quite absurd of the government to argue the base is no longer needed because operations to bring stability to Afghanistan have been successfully completed. It is quite peculiar that a government that squeals with terror over Hizb Ut-Tahrir should express such airy confidence about a country besieged by the Taliban.

In one of the more breath-taking passages in the statement accompanying bill, the government actually quotes Human Rights Watch as saying that too many civilian casualties have been killed in U.S. and NATO bombing sorties. Presumably, this is not the same Human Rights Watch that just this week criticized Kyrgyzstan for allowing Uzbek special services to snatch refugees and asylum seekers off its streets.

No, the process is being dragged out for longer than it needs to be, specifically because there must still be some hope that the U.S. will come up with an offer that Bishkek can’t refuse.

It is interesting to speculate what such an offer might be. Last time that Bakiyev was making rent demands it was $200 million per year. The U.S. currently pays $150 million between rent and other assorted goods and services.

Pig Wearing Lipstick

Aid Package: Pig Wearing Lipstick

For the sake of perspective, we should consider looking at what the Russians brought to the table. A lot of figures are being bandied about, but this is the full breakdown of the four-point deal:

1) Russia will issue a line of credit of $300 million to be paid on April 30 this year. The interest charged on the loan will be 0.75 per annum, and the sum is repayable over a 40-year period in biannual installments. The first payment is due on March 15, 2016, and the final payment has to be made by Sept. 15, 2049.

2) Russia will cancel all Kyrgyzstan’s remaining g debts, which total a little over $193 million. In exchange for that, however, Russia gets a 48 percent stake in Dastan, a company that produces marine torpedoes, oddly enough. It will also receive ownership of some building in Bishkek, although I’m not quite certain which one they are talking about.

3) The Russian Finance Ministry will give $150 million in financial assistance to be transferred on April 30, 2009.

This part is the only real gift as such, and it would be an interesting parlour game to speculate where all this cash will end up. Already, lobbyists are said to lining up to ask for money to build dairy and tobacco factories.

4) Most interesting, is the last agreement on the construction of the Kambaratinsk hydroelectricity generation plant. The Russian and Kyrgyz governments will take joint 50/50 ownership of a company that will oversee the construction of the facility via their state-owned power companies _ OAO Inter RAO UES and OAO Electrical Stations respectively.

Russia will “enable the raising of $1.7 billion for the construction building of Kambaratinsk in credit (with a grace period of eight years and loan maturity of 20 years) for the company” building the plant over a four-year period, starting from 2009.

Since this is the part of the deal that is the most eye-catching in numerical terms, it might be worth considering its exact significance. Again, it seems that the money is in fact little more than a loan, which will not in all likelihood even be issued by the Russian government. Not that it makes any difference if the government is stumping up the cash or not, but what investor in their right mind would sink their money into a project fraught with as many disastrous possibilities as a Central Asian hydroelectric dam. In any event, the actual building work will most likely be done by a Russian company. At best, this is a grand job creation scheme that could employ a few hundred people for a few years some time over the coming decade. The actual electricity won’t come online for probably six-seven years at a generous estimate.

It is also odd that Russia should backing this giant hydroelectric plant only a couple of weeks after President Dimitry Medvedev angered the Tajiks by suggesting they should ask permission from all their downstream neighbors if they wanted to build Roghun Dam.

Bakiyev plays hardball

Bakiyev plays hardball

The upshot of this all being that Kyrgyzstan hasn’t really got that great a deal. Really, money in the pocket _ pocket being the operative word _ totals no more than $450 million. The cancelled debt is a bad joke; as if Kyrgyzstan could pay it back even if it wanted to. If the United States had been prepared to look at $200-250 per annum in Manas fees and aid over the next two to three years, it would have easily presented a tempting offer of no-strings-attached cash on the table. Indeed, since operations at the air base were set to step up a few notches, it is quite likely that figure would have been reached without breaking too much sweat anyway.

As things stand now, the Kyrgyz parliament may possibly have passed the point of no return on Friday, however, by ratifying the four-point agreement detailed above. Strangely, this decidedly suspicious bit of legislation passed quickly and without the slightest murmur of discussion about what might lie behind it, or how and when the monies in question will be spent.

Having given the aid the green light, it remains to see how Kyrgyzstan could even begin to weasel out of its obligations to Russia on Manas. Provided it did commit itself at all.

After all, is it beyond the realms of possibility that this whole plot has been cooked up in concert by Bishkek and Moscow?

Consider the following premises and possibilities:

          While Russia wants Manas closed, it should really be fairly low on its list of actual practical priorities, and it does see some benefit in somebody addressing the problems of regional instability.

          Medvedev has talked in recent days about wanting to see movement on halting NATO expansion and plans to develop the missile defense shield in Europe.

          Linking these issues allows for reaching a compromise that sees Russia getting its way on either NATO or the defense shield, the United States holding onto Manas, and Kyrgyzstan getting much-needed cash from Moscow and Washington.

Ultimately, if it is a gambit, it is likely doomed to failure because of the perceived strategic costs to the U.S., but not because of the monetary concerns. Its failure would also mean Bakiyev has been played like a chump: No Manas rent, no diplomatic leverage, and a pretty meager pot of real cash to show for it.

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Perhaps the strangest piece of good news to come out of Central Asia so far this year is that Uzbekistan will maintain its strong pace of economic growth, despite the worsening global crisis. As the Foreign Economic Relations Minister Elyor Ganiyev said at a forum this week citing International Monetary Fund figures, Uzbek gross domestic product growth will hit 7 percent in 2009, a relatively small drop against 9 percent last year.

Ganiyev

Ganiyev

The official Uzbek forecast is a little more generous, putting economic growth this year at 7.8 percent, an achievement Ganiyev puts down to “new investment projects.”

According to the findings of an IMF mission that visited Uzbekistan in December,  the country “has remained resilient to the ongoing international credit crisis and the downturn in developed economies, with … large external current account and fiscal surpluses, further accumulation of foreign exchange reserves, and continued stability in the banking system.”

In explaining its reduced expectations for 2009, the IMF cites the dropping prices and demand for Uzbekistan’s export commodities, as well as the oft-cited diminution of remittances. Also, like many countries in the region, Uzbekistan’s lack of integration into the global economy will insulate it from the type of credit woes that have bedeviled Kazakhstan.

Perhaps one of the IMF’s most interesting findings is the idea that the government should coordinate with the lending sector to ensure a steady availability of cash _ which would make a change.

The state of the world economy may ironically prove to be a helpful boost to the instinctively autarchic Uzbek authorities, who can claim to have been proved right all along in their resolute determination to spurn Western capitalist models.

Loadsamoney

Uzbekistan: Loadsamoney

Speaking at a ceremony last month to mark the 16th anniversary of the Constitution, President Islam Karimov assured listeners in a keynote speech that the country had “sufficient reserves of resilience and the necessary resource base to ensure the steady and uninterrupted work of [its] financial, economic, budget and banking and credit systems.”

Taking a veiled pop at some of his neighbours, Karimov reminded the audience of the “ill-thought out external debt policy of many nations [that] made their economies vulnerable and very dependent on external factors and threats.”

To back this up, he cited the fact that Uzbekistan’s external debt is 13.3% of its GDP and is below 31% of its total exports.

It is in all this macroeconomic data that Karimov often seems to find solace, since there is nothing reassuring about the fact that anything between one-fifth and a quarter of the population Uzbekistan lives in poverty. There is also little in Karimov’s unique model, as he likes to describe it, that suggests the government is prepared to allow those sectors of the economy that will most benefit the poor to develop. Repeatedly, over the years, Uzbek authorities have clamped down on cross-border trade and heavily penalized small merchants.

It is hardly surprising that such large amounts of Uzbeks have been compelled to emigrate abroad, like so many of their Central Asian counterparts.

The country’s complete isolation means, however, that little firm information is available to the outside world about the scale of suffering that the majority of the population endures while a select minority benefits from the cash earned from cotton, gold and gas exports. In terms of public relations, the illusion of economic stability, not to say success, represents a victory for Karimov’s government, which will make its eventual unraveling only that much more bitter.

The electricity crisis in Tajikistan has taken yet a further turn for the worse, as state power company Barki Tojik announces that supplies to the capital, Dushanbe, will henceforth be limited to 15 hours per day. Even worse, those parts of the country currently receiving two-three hours of electricity daily _ namely the Sogd and Khatlon regions _ face yet further cuts.

Luxury Goods Sale in Tajikistan

Luxury Goods Sale in Tajikistan

The most desperate aspect of all this hardship, however, is that it is eminently avoidable and has been caused in part by an unpleasant episode of customary Central Asian bickering.

Back in October, Tajikistan sealed a deal with Turkmenistan to import electricity at $0.03 per kilowatt hour. As agreed, 400 million kilowatt hours of electricity were delivered between November and the end of last year. Under the agreement, the Turkmens agreed to supply a further 1.2 billion kilowatt hours of electricity annually until 2012. While not meeting the disastrous shortfall in power supplies, the agreement would have given the Tajiks much-needed relief and avoided the scale of power cuts seen last year, which virtually brought the country to a standstill as it suffered one of its worst winters in living memory.

Anyway, that deal was scuppered at the start of the month by Uzbekistan, which lies between the two countries and has seemingly refused to agree to a new transit agreement.

Beyond mere comic book villainy, there is a back-story to all this that should shed some light on why it is exactly that Tashkent is behaving the way it is.

According to their official version, the Uzbeks have had technical problems at a local substation, making electricity transits impossible.

Tajik officials, however, are skeptical and say that their requests to visit the site and inspect the pace of repair have been abruptly rebuffed.

Furthermore, Tajik Deputy Energy Minister Pulod Muhiddinov says the Uzbeks promised not to halt Turkmen electricity deliveries if Tajikistan would agreed to buy gas for $249 per 1,000 cubic meters, a pretty hefty sum for Dushanbe.

Tajikistan duly agreed to that arrangement at the end of December, only for the Uzbeks to renege on their word, says Muhiddinov.

Writing at Ferghana.ru, Sanobar Shermatova suggests a further kink in the tale (link in Russian):

The conflict of interests reached its ultimatum at the end of last year, when Kazakhstan, Kyrgyzstan and Tajikistan agreed on sharing water, gas and fuel without consulting Uzbekistan. The reaction came immediately: Uzbekistan announced it would suspend its membership in the Eurasian Economic Community (Eurasec), closed its border with Tajikistan, and increased its gas prices to Kyrgyzstan and Tajikistan. The offence even reached the Russian leadership, which was called upon to act as referee as Uzbekistan sought Moscow’s support in its neighborly dispute.

The specifics of this account are not altogether clear or certain, not least the supposed tri-partite agreement from late last year, which does not appear to have been reported anywhere. What is certain, however, is that Uzbekistan has chosen to throw itself into open hostility with its neighbors.

Nurek Damn!

Nurek Damn!

In turn, Tajikistan has warned that now it is running short of electricity, it has been forced to drain additional supplies from the Nurek and Kairakkum reservoirs to generate hydropower. In doing so, it will cause a water shortage over the summer months in downstream nations _ namely Uzbekistan, Kazakhstan and Turkmenistan (ironically) _ and thereby possibly result in the ruin of vital cash crops in those countries. Uzbekistan in particular, with its heavy reliance on agricultural output for export revenue and internal consumption needs, could be catastrophically affected for yet another year.

Unwisely sticking his oar in and appearing to take a pro-Uzbek stance, Russian President Dimitry Medvedev also spoke out on the water issue while visiting Uzbekistan a few days ago by suggesting that Tajikistan’s grand plans to build a number of hydropower stations along its rivers could cause regional resource crises and should be discussed by all Central Asian nations. This is a particularly strange observation, since Russia is involved in building the giant Rogun power station on Vakhsh river _ a point not lost on the Tajik foreign ministry, which duly complained to the Russian embassy in Dushanbe.

This signal appeared to suggest that Moscow will likely favour Uzbek reasons in future regional disputes, which is yet another intriguing twist in the broader play for influence in Central Asia. Russia’s services as a fig-leaf for Uzbekistan’s gross human rights violations have become effectively redundant, since Tashkent clearly doesn’t give a damn what anyone thinks of it anyway. But Uzbekistan has now found this new purpose for its former Soviet comrade _ one that could avoid Karimov falling back into the arms of his erstwhile American sponsors. In return, Medvedev bagged a useful gas deal that will help replenish Gazprom export reserves and also secured a guarantee to expand the Central Asia-Center gas pipeline, which will be needed if Turkmenistan is to meet its ambitious gas contracts.

Not Tajik

Bob Hope: Not Tajik

To put a new spin on the old gag, the United States had Johnny Cash and Bob Hope; Tajikistan and Kyrgyzstan have no cash and no hope. Reliant on Russian largesse, they have little room for maneuver, with the slender exception of the water issue. Abusing of that, however, would be self-destructive in the extreme and ultimately pointless.

Of course, this whole ugly spectacle is fundamentally needless and another reminder of why the collapse of the Soviet Union was, if not a tragedy, a wretched inconvenience for this part of the world. Countless summits have been held over the years to regulate cooperation, but again and again, the rhetoric and high hopes have been dashed by petty disputes and pride.

And, if isn’t too trite to point out, the regular long-suffering citizens of Central Asia will be the ones that continue to bear the brunt.

Weeks after Uzbekistan surprised the region by suspending its membership in the Eurasian Economic Community (Eurasec) _ a pale imitation of the early incarnation of the European Union _ President Dimitry Medvedev is due to pay a visit on his counterpart in Tashkent.

The rapidity of Medvedev’s deployment should give some indication of the degree of concern felt in Moscow at their undependable comrade’s latest betrayal. This is not because Eurasec is in any real sense a core component in helping firm ties between the former constituents of the Soviet Union. The primary source of apprehension is that departure from Eurasec could presage suspension of membership in the Collective Security Treaty Organization _ a pale imitation of NATO _ and, much worse, a rekindling of warm diplomatic ties with the West.

Keeping Medvedev at arm's length?

Keeping Medvedev at arm's length?

There is nothing particularly new about the erratic quality of Uzbek foreign policy, which Karimov regularly shakes up like a cruel child with an ant farm. In part, Tashkent understands that the West _ and the United States in particular _ will surely come to rely on it once again as operations in Afghanistan look set for a shift up in gear.

For a change, however, Uzbekistan looks like it may pursue a far more nuanced line than usual. In the past, the Uzbeks have adopted an almost principled, if self-damaging, position of declining to accommodate rival suitors.

Meanwhile, Medvedev continues to show his preference for a “soft power” overture by highlighting the importance of commercial ties, instead of opting for the bully-boy tactics of Vladimir Putin. 

This week, Russian Deputy Prime Minister Sergei Ivanov spoke at a bilateral commission ahead of Medvedev’s visit about opportunities for expanding cooperation in a number of areas of industry and in the energy sector in particular. The base is substantial and possibilities are promising:

Ivanov said that in January-October 2008, bilateral trade increased by 9% to US$2.842 billion as against the same period of 2007.

In more concrete terms, Russia has demonstrated that its insistence on instituting market relations with former Soviet states _ arguably the real cause of the endless row with Ukraine _ is sincere. Accordingly, Russia’s Gazprom agreed recently to pay Uzbekistan and Turkmenistan  more than $301 per 1,000 cubic meters for their gas. 

Karimov in turn struck a favourable note by arguing in part for the preservation of the post-Soviet coordination union, the Commonwealth of Independent States. Uzreport quotes further (password required):

“We see the prospects of the development of the Shanghai Cooperation Organisation (SCO) and CSTO,” the Uzbek leader noted.

The president of Uzbekistan also said that “Uzbekistan entirely supports Russia’s foreign policy course” and on all the key issues “we have a similar stance.”

Karimov stressed that “there are no undercurrents that could change this state of affairs.”

So, perhaps it might finally be possible when speaking about Uzbek foreign policy to talk about evolution _ as opposed instead of developments, like you might do of a suprise twist in a Mexican soap opera.

Conversely, while Tashkent opens up to the possibility of two-track diplomatic program that allows for full-blooded interaction with Moscow and Washington, it continues obstinately to refuse entertaining the notion of integrating more deeply with its regional neighbours.

Of course, come the day that Medvedev visits, expect nothing but tedious platitudes.