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October 24, 2012
Russia's recent striking of far-reaching deals in the energy and security spheres with Kyrgyzstan and Tajikistan show Moscow's determination to regain ground in Central Asia. Russia has ensured its continued military presence in the region as the Nato withdrawal from Afghanistan approaches, offering in return support on key economic issues hydropower in Kyrgyzstan and fuel in Tajikistan.
On his September 20 visit to Bishkek, Russian President Vladimir Putin succeeded in extending the lease on Russia's airbase at Kant in northern Kyrgyzstan until 2032, with provision for a five-year extension. Moscow agreed to settle Kyrgyzstan's debts of $489m as part of a package of deals that also included agreements on funding for two large-scale hydropower projects, Kambarata and the Upper Naryn cascade.
Two weeks later, Putin flew to Dushanbe for another round of talks. On October 5, it was announced that he had reached an agreement ensuring the continued presence of Russia's 201st Motor Rifle Division in Tajikistan for 30 years. The amount that Russia will pay to lease its bases in Tajikistan has not been disclosed, but Putin aide Yury Ushakov told Russian journalists that it would be "almost free". Tajikistan, meanwhile, is set to benefit from a new deal on cooperation in combatting drug trafficking, and a Russian concession on residency and work permits for Tajik migrant workers.
Back in the game
With the Tajik agreements hard on the heels of those signed in Bishkek, this appears to be a concerted Russian effort to cement its relations with the Central Asian countries more than two decades after the break-up of the Soviet Union. They follow several years of greater economic integration led by Moscow in the post-Soviet space, most significantly with the creation of the Customs Union, which currently comprises Russia, Belarus and Kazakhstan, but is due to be expanded.
"Even before Putin came back to power, Russia has been trying to redefine a long-term role for itself in as many of the Central Asian countries as possible," Martha Brill Olcott, senior associate at the Carnegie Endowment for International Peace, tells bne. "What we see is Russia realising that if it doesn't define a new role, then it is going to be eclipsed in Central Asia. Russia feels the pressure of time if it wants to preserve a special role for itself in the economy and security of any of the five countries."
In less than two years, Nato-led forces are set to complete their withdrawal from Afghanistan, which borders three of the Central Asian republics. There are concerns not just in Moscow but also in many of the Central Asian capitals that the Nato withdrawal is premature, and will leave the region more vulnerable to the dual threats of terrorism and drug trafficking. Tajikistan is particularly at risk because of its long and porous border with Afghanistan, a fact highlighted by the fighting between government forces and militants around Khorog, a town on the Afghan border, in July and August this year.
According to Olcott, withdrawal from Afghanistan is at the forefront of everybody's minds. "It creates a potential security vacuum in the region," she says, "that could have the capacity to tip already unstable states into greater instability."
At a time when the West's interest in Afghanistan and the wider Central Asian region appears to be declining, especially from a security perspective, Russia is staking its long-term claim. Its potential role as the protector of Kyrgyzstan and Tajikistan from future instability serves Moscow's ambition of re-establishing its dominant role in what it calls its "near abroad".
"From Russia's perspective it makes sense to take advantage of the common historic ties that it has with the Central Asian countries. Russia is aiming to become a global player and promoting its security and business interests in its neighbourhood is a logical move," says Lilit Gevorgyan, senior analyst of Russia/CIS at IHS Global Insight. "The military and political clout in these countries can also serve as a risk mitigating factor for Russian businesses if they enter the difficult Kyrgyz and Tajik markets."
Chinese whispers
Countries from all sides from Europe to Iran, and South Korea to India have sought to take a piece of Central Asia's natural resources. However, the greatest change in recent years has been the emergence of China, which has established an economic presence in all five republics. In addition to the construction of new oil and gas pipelines to China, Chinese companies bought up assets in the oil and gas and mineral sectors across the region. Chinese companies are also involved in infrastructure projects; Tajikistan's road-building programme, for example, has been funded by soft loans from China, and carried out by Chinese construction companies.
Bringing Kyrgyzstan and Tajikistan into the Customs Union will help to counter Beijing's growing economic influence. Kyrgyzstan is already on the way to becoming a member, and its accession would pave the way for Tajikistan which does not share a border with any of the current members to join. Expanding the Customs Union is expected to form the basis for deeper economic integration in the region.
Olcott points out that when considering Russian motivation, "the economic and security dimensions are very intertwined". While there are definite economic advantages to expanding the Customs Union, at the same time there is a perception on the part of many Russians that Putin has also made strategic gains in Moscow's traditional sphere of influence.
Within Central Asia, it has been easier for Russia to influence Kyrgyzstan and Tajikistan, which lack the oil and gas resources and are therefore are highly dependent on Russia economically. Russia is the main source of remittance payments from migrant workers from Tajikistan and Kyrgyzstan. In both countries these make up a substantial share of GDP; in Tajikistan, remittances from migrant workers account almost 50% of GDP, making it the most remittance-dependent country in the world.
The power that Moscow wields is already evident. This was demonstrated by Dushanbe's brief show of independence in 2011, when a Tajik court jailed a Russian and an Estonian pilot for smuggling. Moscow's reaction was swift and decisive; the ensuing crackdown on Tajik migrant workers was followed by the speedy release of the two pilots. Moscow is also widely believed to have at least given its consent to the toppling of the former Kyrgyz president Kurmanbek Bakiyev in 2010. For the current president, Almazbek Atambaev, who presides over the still turbulent Kyrgyz political scene, Moscow's support, psychologically as much as economically, is crucial.
The remaining Central Asian republics have a greater degree of independence thanks to their oil and gas reserves and wider geographic spread of investors. Kazakhstan is already a close ally of Russia, but in the last two decades Moscow's level of influence in Ashgabat and Tashkent has fluctuated.
The new deals signed with Kyrgyzstan and Tajikistan follow a sharp deterioration in Russias relations with Uzbekistan, which according to Wojciech Górecki, Russia expert at the Centre for Eastern Studies (OSW), is in keeping with Moscows divide and rule policy. "For the last 20 years, every deterioration in Moscows relationship with, for example, Tajikistan has been accompanied by a warming in the relationship with Uzbekistan, and vice versa. This is nothing new," Gorecki says.
Relations with Turkmenistan reached a low point in 2009, when Gazprom suddenly suspended taking deliveries of Turkmen gas, causing an explosion that put the country's main export pipeline out of action for months. Relations have since improved, but Ashagbat is still looking away from Moscow toward European and Asian markets, especially China. Gevorgyan points out that Uzbekistan is "once again drifting away from Russia and wooing the West". In 2012, Uzbekistan quit the Russian-led CSTO and in the economic sphere and forced a subsidiary of Russian mobile operator Mobile TeleSystems (MTS) out of business.
At the same time as sealing the deals with Kyrgyzstan, Putin also invited Kazakhstan and Uzbekistan to take part in planned hydropower projects in Kyrgyzstan. The proposal was intended to break the deadlock in Central Asia over the construction of new hydropower plants. This is fiercely opposed by Tashkent over fears they will restrict water supplies to Uzbekistan's cotton fields, and Putin's proposal got an unenthusiastic response.
Had the approach been successful, it would have further reinforced Russia's position not just as a source of funds and military might but as the region's diplomatic power broker. The deals already signed in September and October do, however, send out a strong signal to the whole Central Asian region about Moscow's intentions to remain the dominant power in the region.
Russia's new role in Central Asia - BUSINESS NEW EUROPE
Russia's recent striking of far-reaching deals in the energy and security spheres with Kyrgyzstan and Tajikistan show Moscow's determination to regain ground in Central Asia. Russia has ensured its continued military presence in the region as the Nato withdrawal from Afghanistan approaches, offering in return support on key economic issues hydropower in Kyrgyzstan and fuel in Tajikistan.
On his September 20 visit to Bishkek, Russian President Vladimir Putin succeeded in extending the lease on Russia's airbase at Kant in northern Kyrgyzstan until 2032, with provision for a five-year extension. Moscow agreed to settle Kyrgyzstan's debts of $489m as part of a package of deals that also included agreements on funding for two large-scale hydropower projects, Kambarata and the Upper Naryn cascade.
Two weeks later, Putin flew to Dushanbe for another round of talks. On October 5, it was announced that he had reached an agreement ensuring the continued presence of Russia's 201st Motor Rifle Division in Tajikistan for 30 years. The amount that Russia will pay to lease its bases in Tajikistan has not been disclosed, but Putin aide Yury Ushakov told Russian journalists that it would be "almost free". Tajikistan, meanwhile, is set to benefit from a new deal on cooperation in combatting drug trafficking, and a Russian concession on residency and work permits for Tajik migrant workers.
Back in the game
With the Tajik agreements hard on the heels of those signed in Bishkek, this appears to be a concerted Russian effort to cement its relations with the Central Asian countries more than two decades after the break-up of the Soviet Union. They follow several years of greater economic integration led by Moscow in the post-Soviet space, most significantly with the creation of the Customs Union, which currently comprises Russia, Belarus and Kazakhstan, but is due to be expanded.
"Even before Putin came back to power, Russia has been trying to redefine a long-term role for itself in as many of the Central Asian countries as possible," Martha Brill Olcott, senior associate at the Carnegie Endowment for International Peace, tells bne. "What we see is Russia realising that if it doesn't define a new role, then it is going to be eclipsed in Central Asia. Russia feels the pressure of time if it wants to preserve a special role for itself in the economy and security of any of the five countries."
In less than two years, Nato-led forces are set to complete their withdrawal from Afghanistan, which borders three of the Central Asian republics. There are concerns not just in Moscow but also in many of the Central Asian capitals that the Nato withdrawal is premature, and will leave the region more vulnerable to the dual threats of terrorism and drug trafficking. Tajikistan is particularly at risk because of its long and porous border with Afghanistan, a fact highlighted by the fighting between government forces and militants around Khorog, a town on the Afghan border, in July and August this year.
According to Olcott, withdrawal from Afghanistan is at the forefront of everybody's minds. "It creates a potential security vacuum in the region," she says, "that could have the capacity to tip already unstable states into greater instability."
At a time when the West's interest in Afghanistan and the wider Central Asian region appears to be declining, especially from a security perspective, Russia is staking its long-term claim. Its potential role as the protector of Kyrgyzstan and Tajikistan from future instability serves Moscow's ambition of re-establishing its dominant role in what it calls its "near abroad".
"From Russia's perspective it makes sense to take advantage of the common historic ties that it has with the Central Asian countries. Russia is aiming to become a global player and promoting its security and business interests in its neighbourhood is a logical move," says Lilit Gevorgyan, senior analyst of Russia/CIS at IHS Global Insight. "The military and political clout in these countries can also serve as a risk mitigating factor for Russian businesses if they enter the difficult Kyrgyz and Tajik markets."
Chinese whispers
Countries from all sides from Europe to Iran, and South Korea to India have sought to take a piece of Central Asia's natural resources. However, the greatest change in recent years has been the emergence of China, which has established an economic presence in all five republics. In addition to the construction of new oil and gas pipelines to China, Chinese companies bought up assets in the oil and gas and mineral sectors across the region. Chinese companies are also involved in infrastructure projects; Tajikistan's road-building programme, for example, has been funded by soft loans from China, and carried out by Chinese construction companies.
Bringing Kyrgyzstan and Tajikistan into the Customs Union will help to counter Beijing's growing economic influence. Kyrgyzstan is already on the way to becoming a member, and its accession would pave the way for Tajikistan which does not share a border with any of the current members to join. Expanding the Customs Union is expected to form the basis for deeper economic integration in the region.
Olcott points out that when considering Russian motivation, "the economic and security dimensions are very intertwined". While there are definite economic advantages to expanding the Customs Union, at the same time there is a perception on the part of many Russians that Putin has also made strategic gains in Moscow's traditional sphere of influence.
Within Central Asia, it has been easier for Russia to influence Kyrgyzstan and Tajikistan, which lack the oil and gas resources and are therefore are highly dependent on Russia economically. Russia is the main source of remittance payments from migrant workers from Tajikistan and Kyrgyzstan. In both countries these make up a substantial share of GDP; in Tajikistan, remittances from migrant workers account almost 50% of GDP, making it the most remittance-dependent country in the world.
The power that Moscow wields is already evident. This was demonstrated by Dushanbe's brief show of independence in 2011, when a Tajik court jailed a Russian and an Estonian pilot for smuggling. Moscow's reaction was swift and decisive; the ensuing crackdown on Tajik migrant workers was followed by the speedy release of the two pilots. Moscow is also widely believed to have at least given its consent to the toppling of the former Kyrgyz president Kurmanbek Bakiyev in 2010. For the current president, Almazbek Atambaev, who presides over the still turbulent Kyrgyz political scene, Moscow's support, psychologically as much as economically, is crucial.
The remaining Central Asian republics have a greater degree of independence thanks to their oil and gas reserves and wider geographic spread of investors. Kazakhstan is already a close ally of Russia, but in the last two decades Moscow's level of influence in Ashgabat and Tashkent has fluctuated.
The new deals signed with Kyrgyzstan and Tajikistan follow a sharp deterioration in Russias relations with Uzbekistan, which according to Wojciech Górecki, Russia expert at the Centre for Eastern Studies (OSW), is in keeping with Moscows divide and rule policy. "For the last 20 years, every deterioration in Moscows relationship with, for example, Tajikistan has been accompanied by a warming in the relationship with Uzbekistan, and vice versa. This is nothing new," Gorecki says.
Relations with Turkmenistan reached a low point in 2009, when Gazprom suddenly suspended taking deliveries of Turkmen gas, causing an explosion that put the country's main export pipeline out of action for months. Relations have since improved, but Ashagbat is still looking away from Moscow toward European and Asian markets, especially China. Gevorgyan points out that Uzbekistan is "once again drifting away from Russia and wooing the West". In 2012, Uzbekistan quit the Russian-led CSTO and in the economic sphere and forced a subsidiary of Russian mobile operator Mobile TeleSystems (MTS) out of business.
At the same time as sealing the deals with Kyrgyzstan, Putin also invited Kazakhstan and Uzbekistan to take part in planned hydropower projects in Kyrgyzstan. The proposal was intended to break the deadlock in Central Asia over the construction of new hydropower plants. This is fiercely opposed by Tashkent over fears they will restrict water supplies to Uzbekistan's cotton fields, and Putin's proposal got an unenthusiastic response.
Had the approach been successful, it would have further reinforced Russia's position not just as a source of funds and military might but as the region's diplomatic power broker. The deals already signed in September and October do, however, send out a strong signal to the whole Central Asian region about Moscow's intentions to remain the dominant power in the region.
Russia's new role in Central Asia - BUSINESS NEW EUROPE
