ECONOMY AND SECURITY IN CENTRAL ASIA SINCE 9/11: A SKEPTICAL LOOK

Martin C. SPECHLER


Martin C. Spechler, Professor of Economics, Indiana University-Purdue University Indianapolis (IUPUI), and faculty affiliate, Inner Asian and Uralic National Resource Center, Indiana University (U.S.A.)


The dramatic terrorist attacks of 11 September, 2001, which were directed from Afghanistan, have drawn the attention of the U.S.A. and the West generally to Central Asia and created expectations by some, and fears by others, that the security and economic situations there would be transformed. The changes have proved to be short-lived and smallless a transformation than an interlude in the war against terrorists worldwide. Though several of the political actors involved in Central Asia have had an interest in creating the appearance of basic transformation, little about the economies (or societies) seems to have altered since I was last there in the summer of 2001. Aside from oil extraction and transportation, which affects west Kazakhstan and Azerbaijan mostly, these countries remain poor, isolated, and growing slowly. Their politics remain autocratic and corrupt, and their societies conservative and moving only very slowly toward global integration. Now that the war against the Taliban is winding down, the United States and its NATO allies have little further interest to deepen their involvement in Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, or even Kazakhstan. So the security situation also returns to its pre-9/11 position. And since the regimes in these countries are of uncertain popularity and stability, it may be better for outside powers not to become too associated with them in the minds of elites and masses in these countries. Hence the direct aid and security assistance has been modest and indirect, relying on NGOs and multilateral donors like the World Bank and Asian Development Bank. The hopes of some Central Asians that the U.S.A. would now intervene powerfully in their favorand the fears and suspicions of Russian, Chinese, and Iranian commentators along the same linesshould be treated with skepticism. This essay will try to anchor this skepticism in hard facts.

With regard to Uzbekistan, the most powerful of Central Asian states and the one I know best, there has been an exchange. Basing rights were granted, after President Vladimir Putin lifted Russias initial objections, for about 1,500-2,000 American service personnel at the Khanabad airbase. These rights were supposedly for humanitarian and rescue purposes only. Understandably, Uzbekistans President Islam Karimov feared Taliban revenge for any assistance to the Americans, and hence was reluctant to open the bridge south from Termez over the Amu Darya (the river Oxus) until the threat subsided. With Juma Namangani of the Islamic Movement of Uzbekistan (IMU) killed by U.S. weapons, Karimov now has to deal only with the Uzbek warlord Rashid Dostum of Mazar-i-Sharif, a shady and unreliable character even by Afghan standards. (Their relations are said to be cool.) Then in November 2001, the Bush Administration promised the Uzbeks an additional $100 million in economic and humanitarian aid and assistance in the security sphere.1 One later learned that this aid, increased to $150 million by March, is to be passed through NGOs and civic groups, not the government itself.2 The World Bank was pressed to announce new loans and debt relief, while the European Bank for Reconstruction and Development upped their planned investments for transportation projects and utilities. Newmont Mining, as well as Australian and Israeli metals companies, signed deals. During his October, 2001, visit to the region, U.S. Secretary of Defense Donald Rumsfeld held out the prospect of long-term interests in Uzbekistan. President Karimovs concern that his embrace would lead only to a one-night stand was met by President Bushs letter promising a long-term partnership, a proposal promptly read over state-controlled Uzbekistan television.3 Uzbekistan was also duly praised at the November NATO Council meeting and its human rights record passed over in silence.

By spring, however, Assistant Secretary of State Lorne Craner cautioned that further expansion of ties was contingent on human rights improvement, especially with regard to religious education, a sensitive matter in this secular-Islamic country. No meaningful long-term U.S.-Uzbek plan has been forthcoming since.4 Throughout the year, Russias historic interest in Central Asia has often been acknowledged. According to knowledgeable military sources, American troop levels in Uzbekistan are expected to decline to a more sustainable level for the indefinite future. The base will not be upgraded in the foreseeable future, according to B. Lynn Pascoe, a high State Department official speaking at Yale University on 20 September, 2002.5 One reason for the modest American commitment to Uzbekistan is the difficulty of securing overflight routes to Central Asia for expensive but essential supplies and the drain on air crews involved in mid-air refueling. Another is present preparations for war against the Saddam Hussein regime in Iraqa campaign in which Central Asian states will have little role. President Karimov, evidently worried about flagging support, has repeatedly stressed his loyal security connection with the U.S.A.6

Uzbeks (and outside analysts) should recognize that the American interest in the country is bound to be moderate in the long-run. Uzbekistan has no energy resources for export outside the region, their gold and cotton are abundant elsewhere, and as long as the states elites keep the Islamists and the drug smugglers under control, the U.S.A. has little reason to replay the Great Game, however much people in the area expect it. Notions of reviving the Silk Road by TRACECA or otherwise are simply not economically or commercially attractive. The same can be said, even more emphatically, for the much smaller and even more remote mountain countries of Kyrgyzstan and Tajikistan. President Askar Akaev, at least, seems to realize this and has made a number of statements reassuring the Russians of their long-established ties. Of course, this does not prevent scientific and cultural contacts, which Americans have with most every country in the world. But all this would not justify suspicions voiced in Tehran, Moscow, and Beijing that the U.S.A. is attempting to establish hegemony in Central Asia.

The aid promised to Uzbekistan is not significant in an economy of 25 million people with a per capita income (in purchasing power parity terms) of perhaps $2,500. President Karimov has been quoted as saying that international donors are earmarking at least $9 billion ... for reconstruction of the region. This kind of unsubstantiated hype is hardly credible, least of all by Uzbeks themselves. (Pledges of $1 billion for rebuilding Tajikistan, for example, have yielded almost nothing so far, according to President Emomali Rakhmonov.7) Of course, U.S. forces do buy some local food. But American soldiers are discouraged from contact with the locals, except for official liaison with the Uzbek police and armed forces. Yes, UNICEF has reportedly purchased tons of food and medicine in Uzbekistan for storage and eventual shipment to northern Afghanistan, and this is a help to the economy of the Ferghana Valley. Similarly, USAID bought some $6 million in wheat from Kazakhstan for Afghanistan. But clearly these deals are short-term only and have had no significant effect on the Uzbek economy. The drought has lifted, but, alas, excessive rain hurt the cotton crop so crucial to Uzbekistans economy and that of parts of the other countries. Growth in Uzbekistan supposedly amounted to only 2% for 2002,8 less than that elsewhere, except for oil-patch Kazakhstan, where petroleum company money is building another East Texas, including a gated residential enclave, on the banks of the Caspian.

In Kyrgyzstan, about 2,000 NATO airmen have taken over the Manas airbase near the capital, Bishkek. Though landing fees and other aid have been increased and local supplies purchased,9 the main beneficiaries seem to be the local prostitutes. Even for the famously friendly and hospitable Kyrgyz, this may sour their welcome. U.S. financial aid to Kyrgyzstan during 2002 was to be about $92 million, according to an American Embassy official in Bishkek.10 Part was planned to be used on environmental projects, another part on Mi-8 helicopters for the Kyrgyz customs service.

As to Kazakhstan, the sole issue is oil. Kazakh overtures to the U.S.A. and NATO for closer military ties have not been taken up so far, although Kazakhstan has participated in Partnership for Peace exercises, as have the other countries. The West wants to diversify its energy sources until such times as the Middle East becomes more stable, West African and other sources become available, or fuel substitution becomes commercial. While the West has little interest in excluding Russia or Russian oil companies from sharing the wealth and transit fees,11 the U.S.A. continues to pressure Kazakhstan to avoid any deal with terrorist-supporting Iran, although pipelines through that country to the Persian Gulf would be the route of choice on a strictly commercial calculation. The Kazakhs do exchange some small amount of oil with Iran through the port of Neka on the Caspian, but larger amounts would require new pipelines to the border. Instead, the U.S. has succeeded in getting the Baku-Ceyhan pipeline started, a great boon to developing U.S.-Turkey-Azerbaijan alliance. Kazakhstan, however, is a difficult customer, and relations with the Chevron combine to exploit the Tengiz field have just run into difficulties again.12 The U.S. has expressed concern about increased repression of dissent in that country, too.13

The Chinese, who several years ago planned a major pipeline from west Kazakhstan to Xinjiang and on to Beijing, have also experienced such commercial problems. The Kazakhs can be bought, but can they stay bought? Besides the large amounts of oil they must buy, the main political interest of the Peoples Republic of China in Kazakhstan (and Kyrgyzstan) is continued control over Uighur activists resident in those neighboring Central Asian countries. To secure those interests, Chinese are now large investors in both Kazakhstan and Kyrgyzstan. No great military presence should be necessary, particularly in view of the fears the enormous Han populations evoke among their neighbors.

Relations among the Central Asian countries have been somewhat improved by the specter of Islamist radicalism and drug trafficking. Of course, their many regional institutions have always ensured frequent contacts.14 In November 2001, President Nazarbaev signed an agreement with Uzbekistan on natural gas. At that time, he is reported to have said that the two countries are drawing so close together that one may say they have one blood and one culture.15 This kind of rhetoric has been voiced before and hasnt overcome the rivalry and mutual dismissals which characterize the two largest regional powers. True, about the same time, most of the two countries border demarcation was agreed to. The presence of Uzbek minorities in southern Kazakhstan, as well as southern Kyrgyzstan and elsewhere, has the potential for conflict, but so far bilateral diplomacy has kept that potential latent.

President Karimov made similar overtures to his neutralist neighbor to the west, Turkmenistan, which claims the Khorezm Region of Uzbekistan. Mutual Uzbek-Turkmen firm-level debts were settled, markets are to be established at the border between Dashkhovuz and Khorezm regions, but the bigger issues of water-sharing remain under discussion. Recent Turkmen imposition of a $6 exit fee for visas for travel to Iran or Uzbekistansupposedly to prevent smuggling of drugs or gasolineseems likely further to antagonize the Uzbeks living just across the eastern border of Turkmenistan in the Lebap Region. These Uzbeks are already dissatisfied with renaming towns in which they are probably a majority to Turkmen ones. For example, ancient Charjou (Farsi for crossroads) has been renamed Turkmenabad (city of the Turkmen).16

Five-sixth of the Uzbek boundary with Tajikistan has also been delimited in recent months, and an agreement in January called for coordinated customs services and police on this frontier, the scene of cross-border raids by the IMU in 1999 and 2000, as well as defensive but deadly mining by Uzbekistan.

Regional cooperation in economic and water matters with the other countries has scarcely improved during this last year.17 Trade among the Central Asian states has stagnated, despite considerable promise.18 One reason is the high import tariffs on foodstuffs into Uzbekistan and the closing of important bazaar markets in that key country. Kazakhstan imposed ad hoc tariffs on Kyrgyz and Uzbek foodstuffs during 1999, and these have not been removed, as far as is known. Such interventions have been common over the last few years. Another chronic problem is the continued inconvertibility of the Uzbek soum for ordinary trade transactions, despite the continual and repeated promises from President Karimovs office to return the country to full convertibility, which it vacated in 1996. The Eurasian Economic Community, a long-proposed free trade area including Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan has never taken effect owing to tariff and tax differences. As before 9/11, state trading relations between Uzbekistan and Kyrgyzstan have been continually afflicted by non-payment for gas. Kyrgyzstans agreements to receive coal from Kazakhstan have also sputtered.

Moscows many attempts to revive collective economic and security arrangements with the Central Asian states remain fairly ineffective. Created under the Collective Security Treaty, a rapid deployment force,19 composed of Kazakh, Kyrgyz, and Tajik forces, lacks crucial Uzbek participation. Its planned airbase at Kant, north of Bishkek, was still vacant in July 2002.20 There have been join maneuvers against bandit formations, however. Russias 201st Motorized Rifle Division and Russian Border Group based in Tajikistan include more and more Tajik contract troops among their 25,000 men, but all are exclusively under Russian commanders. Russia has reportedly agreed to thicken its military base in that country, but other investments seem beyond its ability.21 Kyrgyzstan has invited both Russian and Chinese troops for maneuvers on its territorythe first time Chinese troops have participated abroad, since the Korean War. Military or economics, most relationships in the region continue to be bilateral.

One of the many problems in Central Asia which cannot be solved without regional cooperation is the shortage of water. The Karshi canal, built in Soviet times, is supposed to take water from the Amu Darya where it runs through Turkmenistan and to irrigate fields in the Kashkadarya Region of present-day Uzbekistan. However, poor maintenance and lack of repair over the last fifteen years have rendered the pumping stations and waterway practically inoperative. The loss of water and land over the route affects about 75,000 hectares of Turkmenistan land, too. An agreement in 1996 made these facilities Uzbek property, according to a knowledgeable source, but the Uzbeks lack the funds to reconstruct it and have applied to the World Bank for $180 million for this purpose. However, political difficulties are preventing this vital project, which would be of considerable benefit to both countries and the populations of the area. Similar disagreements are preventing the rational use of water originating in Kyrgyzstan and Tajikistan, although the pre-independence water-sharing formulae are a reasonable legal basis for negotiation, according to Eric W. Sievers, an international lawyer at Harvards Davis Center.22 Kyrgyzstan must be provided with an energy alternative to winter hydropower and funds for maintaining its reservoirs in exchange for releasing water during the summer growing season, but Uzbekistan has rejected such an exchange.23 Multinational donors have been unable to catalyze such regional cooperation so far. Of course, national pricing of water within Uzbekistan and Turkmenistan and repair of horrendously wasteful irrigation systems would all be possible without international cooperation.

So my conclusion is that with the passing of the Afghanistan phase of the war against supporters of terrorism the Central Asia will revert to relative obscurity from a geopolitical point of view, the outskirts of the world economy. Too bad for our friends there, but we owe them the truth.


1 U.S. Special Forces have been training Uzbek military for some timenotably at Garmisch in Germanyand General Tommy Franks arranged for an expansion of such education in U.S. institutions when he visited Uzbekistan in January, 2002. Foreign officers studying at Carlisle Barracks and other military staff colleges in the U.S. are, of course, quite routine. Kazakh officers will soon join them.
2 According to U.S. Assistant Secretary of State Elizabeth Jones, on 11 March, 2002.
3 In December Kazakhstans president, Nursultan Nazarbaev, was promised a long-term strategic partnership.
4 The Strategic Partnership and Cooperation Framework affirms that the U.S.A. would regard with grave concern any external threat to the security and territorial integrity of the Republic of Uzbekistan (quoted from: Ch. Fairbanks, Being There, National Interest, Summer 2002, pp. 39-53). Fairbanks, whose institute deals with Central Asia, recommends the U.S.A. stay in the region to counter Russian imperialism and sustain moderate Islam. In the present authors opinion, continued and enlarged American presence would aggravate the Russian militarys suspicions and inflame Islamist zealots.
5 See: U.S. Department of State, 24 September, 2002.
6 See: RFE/RL, Central Asian Report, 27 October, 2002.
7 Ibidem.
8 The reported annualized rate of the growth for the first half was a little over 4%.
9 See: Washington Monthly, November 2002. The investments of $4.5 million and the $34 million reportedly spent by eight countries at the Ganci AFB (Manas) are of some importance in this small and extremely poor economy, which has experienced slower growth (about 1.3% in real terms) lately.
10 ITAR-TASS, 1 October, 2002.
11 The Russians have dropped their earlier objections to the Baku-Ceyhan pipeline project, but LUKoil and Yukos want a share of the Caspian action. LUKoil has shares in the Karachaganak, Kumkol Severniy, and Tengiz fields in Kazakhstan (see: RFE/RL, Central Asian Report, Vol. 2, No. 38, 3 October, 2002).
12 See: RFE/RL, Central Asian Report, 18 and 21 November, 2002. Deputy Prime Minister Karim Massimov has predicted that what he calls commercial disputes will soon be resolved (see: Kazakhstan News Bulletin, Vol. 4, No. 9, 24 November, 2002).
13 See: U.S. State Department, 24 September, 2002. According to Pascoe, Kazakhstan has led the region in market reform and political openness ...[however,] recent democracy trends have been negative...We have been quite firm in urging President Nazarbaev and his government to reverse this trend. With respect to Uzbekistan, the government has made some movement in the right direction on economic reform and has taken modest steps toward reforming its human rights practices ... [but] there is still far to go and we will continue to encourage progress. Hizb ut-Tahrir, the Islamist revolutionary group, has become more radical and perhaps more desperate since 9/11, as indicated by strange anti-Semitic leaflets calling President Karimov a Jew!
14 See: Martha Brill Olcott, Regional Cooperation in Central Asia and the South Caucasus, in: Robert Ebel and Rajan Menon, eds., Energy and Conflict in Central Asia and the Caucasus, Rowman and Littlefield, Lanham, Maryland, 2000, pp. 123-144.
15 RFE/RL, Central Asian Report, 19 November, 2001.
16 Bess A. Brown, The Uzbeks of Turkmenistan: Potential for Conflict? RFE/RL Report, 20 September, 2002.
17 See: Martin C. Spechler, Regional Cooperation in Central Asia, Problems of Post-Communism, November-December 2002, pp. 42-47.
18 See: Development Alternatives, Inc., Regional Economic Cooperation in Central Asia, Final Report [prepared for the Asian Development Bank], DAI, Bethesda, Maryland, 1998, Chapter VI.
19 See: RFE/RL Newline, 14 May, 2002. Its official name is Collective Forces of Rapid Deployment (CFRD).
20 See: K. Otobaev, Kyrgyzstan Concerns Over New CIS Base, IWPR, 17 July, 2002.
21 See: The Economist, 27 July, 2002, pp. 38-39.
22 Speech at the conference of the Central Eurasian Studies Society, Madison, Wisconsin, 19 October, 2002. In 1997, a U.N.-moderated treaty on international water courses, among other treaties, provided a legal basis for cooperation.
23 See: B. Brown, Uzbekistan Resurrects River-Diversion Scheme: Desperation or Inspiration? RFE/RL Report, 28 September, 2002. In December, however, Kazakhstan and Uzbekistan did agree to maintain the Kyrgyz reservoirs, built in Soviet times for irrigation purposes.

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