Central Asia: The Great Game or the Great Gain?

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]M[/dropcap]uch has been transpiring since the last chapter on Central Asia was written in Must Obama Go? Chapter 21. Presently, Russia has shown that it is a military Superpower that cannot be ignored.  On a Purchasing Power Parity basis, China has become the leading economic power in the world, and Central Asia, because of its energy resources, is being drawn into the whirlpool of global progress.
Because of its complexity, the region has to be defined.  Five Central Asian core countries listed in order of size are, Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan, and Tajikistan.  All are Muslim and are found east of the Caspian Sea and west of China.
Three Silk Road countries are west of the Caspian Sea and are therefore treated differently: Azerbaijan with a strong Iranian influence, Armenia which prides itself in being the first nation to be Christianized, and Georgia which was Joseph Stalin’s home province. Georgia is reckoned to be a South Caucasus country.
Bosnia, Albania, Kosovo and perhaps Abkhazia are different in that the majority are “white Muslims,” hence the classification that they are “white Muslim” countries.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]S[/dropcap]even states share a culture with the Central Asian states but as they are adjoining Russia, they are not considered part of Central Asia.  These seven Caucasian countries are, Abkhazia, Karachy Cherkessia, Kabardino Balkaria, North Ossetia, Ingushetia, Chechnya, and Dagestan.
From the Russo-Persian Treaty of 1813 to the Anglo-Russian Convention of 1907, the British and Russian empires competed for territory in this vast region, hence the strategy, The Great Game of the nineteenth century.  But as Kazakhstan’s leader President Nursultan Nazarbayev sees a rising tide, he envisages not a Great Game but a Great Gain for the region.

Data on Central Asia

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]C[/dropcap]entral Asia was not the only region that Stalinism was responsible for dislocating settled farmers across the region.  The Caucasus region, countries west of the Caspian Sea, and Central Asia were affected adversely by Stalinist policies; this is why all three regions should be treated as a whole. And, nomads, like birds, know green pastures but do not like recognising national boundaries.  Moreover, the Silk Road did not stop at the Caspian Sea.  If one is looking for the end of the Silk Road one has to look to Rome where the craze for Chinese spaghetti flourished.  Italy was the start of Marco Polo’s road trip to China.  The implications of displaced peoples in Central Asia have to be considered.

In 2011, Kazakhs were in the minority in Kazakhstan; today they are 64% of the population.  President Nazarbayev has been able to convince some of his people to return to their homeland.  He has also been able to work peacefully with a fairly large minority of Russians, mainly in the north.  Nazarbayev has plugged Kazakhstan into the Chinese Silk Road Initiative: despite the tenge losing its value by 50% in a month, ¹ Kazakhstan has embarked on the Nurly Zhol Project which entails building a system of roads and railways internally at a cost of $20 billion by 2020, with a variety of funds from institutions made available by China.²    The second part of the Nurly Zhol Project is to build a “New Dubai” at Khorgos.  It will be a nodal point of the Chinese communications network system linking China with Moscow and Europe – the so called, One Belt, One Road (OROB) policy.³    So far trade has already increased 17 times and the projects are still in their infancy.⁴    In foreign policy, Nazarbayev has scored points by working closely with the Russians on their space program and defense, while backing the Ukrainians on the Minsk 2 deal.  With Russia, Kazakhstan has become a founding member of the Eurasian Economic Union.  Nazarbayev has also invited the West to invest in his country.  Kazakhstan is the only post-Soviet country to have gained investment-grade rating since 2002.  Nazarbayev has been a model dictator cum diplomat; had he not been a dictator, he would have been a good statesman.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]C[/dropcap]entral Asia had a rough time during and after Soviet rule: three of the five Central Asian countries are amongst the poorest in the world.  Between 1992 and 1999, these newly created states saw their GDPs fall by 30-40%.  During these traumatic years of the nineties, the Ministry of Education in Kyrgyzstan sent 15K students to religious centers in Saudi Arabia, thus giving rise to Religious Fundamentalism in Central Asia.  New religious organisations sprung, like the National Ahmed Muslim Group, the Centre of Islamic Activities, ‘Noor’ and Tablik.⁵    But since these Muslims were essentially traders and roaming horsemen of the steppes, they preferred secular governments.
Central Asian countries have the problem of dealing with the rights of numerous minorities.  Kazakhstan, for example, has over 100 ethnic groups, but the country does not have serious ethnic clashes.  Usually the majority clan takes the proverbial cake and the minorities get the crumbs.  Such situations lead to frequent protests and civil wars. In Kyrgyzstan, for example, the Kyrgyz are treated as “landlords” and the minorities as “tenants.”⁶
A classic example is Tajikistan, where mountains cover 90% of the land.  The north, particularly in Gorno Badakhshan province, is occupied by Ismailias who are Shias and not recognized as Muslims by the Sunnis.  They amount to just 3% of the population.  But most development funds come from the Aga Khan Development Network (AKDN).  They have to supplement their incomes by smuggling drugs, cigarettes and staples from neighbouring states. They have to protect themselves from Government troops with informal commanders.  Fortunately, a third of the nation’s commerce comes from its largest trading partner, China, and is worth $2 billion a year.   China also agreed to build the Nurobad – 2 dam for $300m.⁷     Japan has become Tajikistan’s sizeable donor which looks at the whole region as a unit and finances dams and agricultural infrastructure.  Its grants to Tajikistan were valued at $7.4 billion and $12 billion a year to Uzbekistan.⁸   Japan also signed deals with Turkmenistan valued at $18 billion for new technologies and for the manufacture of fertilizers, ethylene, polyethylene, polypropylene, and liquid fuel.⁹
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]A[/dropcap] case can be made that inter-ethnic clashes within a country need a dictatorship to hold the country together.  President Josip Broz Tito held Yugoslavia together until 1980 when it split after his death.  Most Central Asian states have dictators within the framework of republics; the method of holding on to power is manipulating the electoral system. Sedghi¹⁰ records the most one-sided elections in recent history: Nursultan Nazarbayev of Kazakhstan had 96% of the vote in 2011; Islam Karimov of Uzbekistan had 90.4% of the vote, compared with 88% in the previous election; Berdymukhammededor garnered 97%; and Saparmurat Niyazov the “father of Turkmenistan” who wondered how anyone could talk of freedom when there was no opposition. He won his election by 100%.  Niyazov’s thinking can be gauged by the fact that he told his people that if they read his book they would attain paradise.
Had it not been for international institutions backed by the US, Russia, China and EU,   Central Asia would not have made such dramatic progress as they have. For example, Uzbekistan objected to the building of hydro-electric projects in Turkmenistan as it exported energy to Turkmenistan and the latter did not have the money to tap its ample water supply.  Global Water Partnership, GWP, financed by the World Bank, UNDP, and SIDA, paid for Turkmenistan’s water projects.¹¹     The fact that the Aral Sea lacks water is indicative of how desperate some countries are; in arid and semi-arid areas agriculture uses 85% of the available water.  Cotton-growing Uzbekistan and Kyrgyzstan benefit most from these water projects.
The Central Asian Regional Economic Cooperation (CAREC), with the Asian Development Bank, is another organisation that hopes to spend $20 billion by 2020 on various projects.  In 2001, just 6 projects were in the pipeline; fourteen years later there were 185 projects, 3 linking Europe and Russia with East Asia, and 3 linking Europe, Russia, and East Asia with South Asia and the Middle East.¹²
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]Y[/dropcap]et another scheme, on a smaller scale, is the Central Asia-South Asia one (CASA – 1000).The financiers are the World Bank, the Islamic Development Bank, the US Agency for International Development (USAID), and the Afghanistan Reconstruction Trust Fund.  Surplus energy from Kyrgyzstan and Tajikistan is exported to South Asia, particularly Pakistan.¹³
A new pipeline, TAPI, which had stalled since Turkmenistan could not agree on ownership rights is expected to deliver gas to India by 2018.  Since Russia has reduced its purchase of Turkmen gas from 45bcm to 4bcm after an explosion on the Turkmen-Uzbekistan border in 2009, Turkmenistan decided to diversify its dependence on China.  By 2030, the world’s second biggest gas field, the Galkynysh field, will yield 250 bcm. TAPI will change the dynamics of Central Asia since it is hoped that South Asia would rupture the hegemony of the Russia-China alliance.¹⁴
But for Kazakhstan which is considered a middle-income country, the other four Central Asian countries benefit from the Generalized Scheme of Preferences, whereby developing countries pay less or no tariffs on their exported goods.  The US and the EU have introduced these concessions to selected emerging nations.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]B[/dropcap]ut one of the relatively poor Central Asian states is likely to be the next tiger: for the Turkmen people “happiness is multiple pipelines.”  One gas pipeline goes from Turkmenistan to Russia and Europe.  Another operating since 2010 is the Dauletabad-Sarakhs-Kargan line. A third runs from Central Asia to China.  A fourth is the TAPI line which will be operational in 2018.  Yet another east-west pipeline is planned to use the Baku-Tiblisi- Ceyhan route.  Turkmenbashi is intended to be an oil and rail depot for the “Turkic Trilateral” scheme linking Turkmenistan, Turkey, and Azerbaijan.  Turkmenistan hopes to supply at least 40% of China’s gas needs, Iran’s 22%, and Russia’s 24%.¹⁵
Central Asia has much potential that is waiting to be tapped: one company is harvesting the Kumtor gold mine in Kyrgyzstan and is contributing taxes to the tune of 6% of the nation’s GDP; ¹⁶   Tajikistan could be a failed state unless it develops its water resources.  Rogun dam on the Vakhsh River will cost $3.2 billion when finished. Upstream from Nuek Dam, the dam will yield 3,600 megawatts of electricity.  Its completion has been delayed partly by finance and partly by opposition from its neighbour, Uzbekistan.  Rogun is miniscule compared with Three Gorges Dam on the Yangste River which will yield 22,500 megawatts.¹⁷   Uzbekistan is already the third largest producer of silkworm cocoons, but its farmers have to be paid adequately for the industry to flourish.
So far we have tried to define Central Asia and noticed that the current usage is inadequate.  We have highlighted the major developments and their associated problems.  We will turn to the policies of the great powers in Central Asia, the USA, Russia, China and the EU and then look at the policies of the regional powers.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]C[/dropcap]hina has been the dynamic leader in this region: its foreign exchange reserves amount to $4 trillion so that it can absorb without much discomfort the downturn it is currently facing.  Its policies towards Central Asia are part of its continental policy of “One Road, One Belt” policy.  It is similar to the American call to “Go West, young man,” except today there are many roads, and many extensions to existing communications networks.  One has therefore to think of a network of connections integrating Eurasia.
China was not always outward-looking. From 1368 to 1644 its introspective view led to the daily weakening of the Ming Dynasty.  It had a similar view from 1644 to 1911 which led to its impoverishment.  In the nineteen seventies, it launched its manufacturing sector along the coast, region by region.  In August 1980s it launched its Special Economic Zones (SEZs) at the coastal cities of Shenzhen, Zhuhai, Shantou, and Xiamen.  These were supposed to be export-driven models, with favourable tax rates.  Four years later, the SEZs were extended to 14 coastal cities,  and in a year’s time to deltas, and at the end of the decade to the “4 Alongs,” along the sea coast, along borders, along rivers, and along railroads.  Foreign capital was allowed: in 2004-5, for instance, FDI amounted to $622.4 billion.  In a measured, progressive way, China became the “factory of the world.”
With this experience, China increased its trade with Central Asia from $1billion in 2000 to $30b in 2010, and $50b in 2013.  By 2010, the year when America started to decline after its financial crisis two year earlier, China had overtaken Russia as the largest investor in Central Asia.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]I[/dropcap]ts methods of penetration as a package were as systematic as they were unique.  It had three, 50-50% joint ventures for Central Asian pipelines: China-Turkmenistan, China-Uzbekistan, and China-Kazakhstan.  Disputes were therefore to be shared equally.  Through its state- controlled, China National Petroleum Corporation (CNPC), it became a regional distributor and exporter of Central Asia’s oil and gas.  CNPC broke the monopoly of Russia’s Gazprom, and became a mediator for governance.  China also became the largest development assistance provider: by July 2014, for instance, China held 41.3% of Tajikistan’s external debt vs World Bank’s 16.4%, and the Asian Development Bank’s 14.3%.  China, in addition, offered technical assistance.¹⁸
China’s plan to develop Xinjiang as a regional hub for its Silk Road route and its Pakistan corridor pleases the US, notes John Hudson, as it weakens Russia.¹⁹   Together with the TAPI project, it is hoped that Central Asia will be more aligned with its southern neighbours than with its northern.  China hopes to invest on highways, electricity and its transmission lines, cement factories, and gold mining in the region.  A People’s Liberation Army general Liu Yazhon expressed China’s opportunity in Central Asia in this way: it is “the thickest piece of cake given to the modern Chinese by the heavens.”²⁰   So, China is encouraging Central Asians to study Mandarin, which 70% of the Chinese people use for business, in their Confucius Institutes.²¹   China’s clout can be gauged by the fact that the US did not want its allies to join the Asian Infrastructure Investment Bank (AIIB), but UK, Germany and Australia did.  AIIB deals in 2013 were valued at $100 billion.  According to Premier Xi Jinping, ruler of China, the intention is to “turn China’s neighbourhood areas into a community of common destiny.” ²²
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]A[/dropcap]nother major country affecting Central Asia is Russia.  The resources of Central Asia do not really attract Russian attention, as Russia has these in relative abundance.  But Russia scored a defensive victory, when the weaker states sought protection from Russia.  Russian political analyst Alexander Nagorny rightly summed up Russia’s power by noting that it “virtually created a core in the Middle East: from Syria to Kurdistan, to Iraq, then to Iran, to China.”²³ Russia will have to increase its military coverage for Central Asia.²⁴    Russia saved Tajikistan from an overthrow by the IS.  Kazakhstan’s leader Nursultan Nazabayev also said the withdrawal of US forces from Afghanistan gave the Taliban an opportunity to try and regain control of parts of the country.  Central Asia is a good market for Russian arms while China, which is building the area as fast as it can, is an ally.  Russia does have a residual investment is some sectors: for instance, Gazprom bought Kyrgyz gas for $1 and debt and it will invest $560m in the next five years for the distribution of gas covering 700 kms.  Besides, Russia is expanding its economic role through its Eurasian Customs Union which will cut tariffs to members and increase it for non-members; in 2015, Armenia and Kyrgyzstan will join it.²⁵      Russia holds 48% of Tajikistan’s debt and 31% of Kyrgyzstan’s.²⁶
Russia sees it as an advantage if China picks up the development slack in Central Asia and if 100 m Russians left Central Asia to settle back in Russia, since December 2013. Russia is short of skilled labour.²⁷
John Harrison²⁸ informs us that the EU started to take a serious interest in Central Asia since 2002.  But until 2014, its investments were rather small and its policy of introducing democratic governance was premature.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]F[/dropcap]rom 2007 to 2013, the EU invested just €75m of which a third was in regional programs and two-thirds in bilateral programs.  From 2014 to 2024, the EU seemed to synchronize its policy with that of the US.  The US referred to these ten years as a “transformational decade.”  Both the US and Europe decided to increase investments: the EU, for instance, decided to invest €1 billion during this decade.²⁹
There were many reasons for the failure of the EU’s initial plan before 2007.  The minorities in each of these countries had their own loyalties and interests which made democracy difficult.  The leaders and their cliques had just gained independence in the nineteen nineties with the result that they needed time, if they were to gain from their alleged kleptocracy.  The natural resources of these countries often overlapped with the result that it was difficult to obtain a coherent regional policy. Consequently, the EU plan to democratise and modernize Central Asia was ill-timed.
The role of Sufism in Central Asia should not be discounted.  Sufism was a spiritual component of Islam and in the Caucasian nations in particular, but also in Central Asia, to a lesser extent. Sufism fought for independence against the infidels, Qara-Khitay, against the Mongols during the twelfth and thirteenth centuries, and against the Russians in the eighteenth and nineteenth centuries.³⁰   Like Turkey, these Central Asian nations looked for secular education and for a Renaissance in Islamic culture; on the other hand, Imams and preachers in Sunni nations of the Middle East seem to be guiding their flock towards traditionalism, for the time being at least.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]D[/dropcap]e-stabilizing trends may also be anticipated from other events in Central Asia.  A fighting force within IS called the Mawarannahar (Transoxiana) is rumoured to have been given $70m for activities in Central Asia.  The areas affected are: Uzbekistan, Tajikistan, South Kyrgyzstan, and South-west Kazakhstan.  IS, it is reported, has recruited 4000 fighters for Syria and Iraq.³¹    Deputy Director of Kazakhstsan’s Institute of Strategic Studies Samat Kushkumbayev feels that the distinction between IS and the Taliban is a myth, which means that Afghanistan may soon play a large part in Central Asia.³²     If the Taliban and IS are working together then some leaders feel that SCO should protect them, if NATO does not.  The withdrawal of American troops from Afghanistan does not augur well either for Afghanistan or Central Asia.
American aid to Central Asia is diffused, which means that it is difficult to give a ball-park figure for investments in the area. US agents have been the World Bank, USAID, and fees paid for the use of bases in Kyrgyzstan and Uzbekistan.  President Obama’s supposedly new policy started in 2009 and had two objectives: a need to strike a balance between security and political priorities; and, to expand the vision of Afghanistan being a stepping stone to Central Asia. But drawing Central Asia towards Afghanistan and South Asia, and away from Russia is going to end up with bitter rivalry in the area.  During the Transformational Decade, 2014-2024, the cornerstone of engagement will be the ABC process: the Annual Bilateral Consultation meetings with all five countries to fight terrorism, promote trade and advance regional integration.³³
To stop coloured revolutions as those that took place from Tunisia to Ukraine, Russia passed a 2012 law which requires Russian Non-Governmental Agencies to register as a foreign agent and disclose overseas financing.  The fine for infringement of the law is between $5,000 and $8,000.  Several NGOs de-registered and several others complained against it. Kazakhstan followed Russia, but introduced a “state humanitarian fund.”³⁴    The other three states are likely to follow Kazakhstan.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]C[/dropcap]hina, Russia, the EU, and the US are the major countries that impact on Central Asia.  Of the junior regional powers, Turkey seems to have been affected the most.  Nursultan Nazarbayev first suggested in 2006 that the Turkic-speaking countries should join together in some form of federation.  On October 3, 2009, Azerbaijan, Kazakhstan, Kyrgyzstan and Turkey agreed by the Nakhahivan Agreement to form the Cooperation Council of Turkic-speaking States (CCTSS/ Turkic Council.  It was the world’s first and borrowed heavily from the UN Charter for its constitution.
Very little emerged from the Nakhahivan Agreement, as Turkey is pre-occupied with the Syrian problem.  It harbours 2m Syrian refugees and has to deal with the independence issues of its Kurdish PKK faction.  Turkey wanted to attract oil and gas pipelines to its territory, and thus link parts of the Turkic Council with Europe.  Turkey bought half of its gas needs from Russian Gazprom.  But when Russia entered the Syrian conflict in favour of Assad, President Erdogan told the Waseda University audience in Tokyo that Russia could lose its contract to build a nuclear plant at Akkuyu, Turkey, at a cost of $20billion.  Turkey could also buy its gas from other sellers.³⁵   For the moment, Turkmenbashi remains an important transportation hub of the Turkic region.
The big powers are playing a very constructive role in Central Asia. But generosity is not always appreciated.  In Tajikistan, for instance, China built a valuable, free, cross-country road for the benefit of national trade, but the Tajik authorities converted it to a toll road.  China warned that if impediments were unnecessarily placed, Central Asia would lose its aid.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]B[/dropcap]ut one wonders whether this constructive role will come to nothing when the big powers are playing world war games on the high seas.  On October 24, USS Lassen sailed peacefully within 12 nautical miles of Subic Reef, an artificially enhanced island. China claimed, wrongly, that the South China Sea was Chinese territory, and “its sovereignty was threatened.”³⁶
Less than a week later, Russian TU-142 Bar aircraft flew within a mile of the USS Reagan, a 100K ton warship.  The US had to send 4 armed fighter jets to escort the Russian planes out of harms’ way.  Recall that a Chinese warship, Liaoning-CV-16, docked at Tartus, Syria, recently to support the Russians.³⁷

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November 2, 2015

Updated, November 8, 2015