Wednesday, 15 December 2004

TURKMEN LEADER EMPHASIZES CENTRAL ASIAN UNITY IN GAS PRICE BID

Published in Analytical Articles

By Gregory Gleason (12/15/2004 issue of the CACI Analyst)

BACKGROUND: The Bukhara summit of Turkmen President Saparmurad Niyazov and Uzbek President Islam Karimov last month marked the first meeting of the two presidents since an assassination attempt on the life of the Turkmen President in 2002 soured relations between the two Central Asian countries. Relations between the leaders have been tense ever since the November 25, 2002 assassination attempt on the Turkmen President’s life. Just a week after the assassination attempt the Turkmen police raided the Uzbek Ambassador’s residence in Ashgabat.
BACKGROUND: The Bukhara summit of Turkmen President Saparmurad Niyazov and Uzbek President Islam Karimov last month marked the first meeting of the two presidents since an assassination attempt on the life of the Turkmen President in 2002 soured relations between the two Central Asian countries. Relations between the leaders have been tense ever since the November 25, 2002 assassination attempt on the Turkmen President’s life. Just a week after the assassination attempt the Turkmen police raided the Uzbek Ambassador’s residence in Ashgabat. Abdurashid Kadyrov, the Uzbek Ambassador to Turkmenistan, was accused of activities incompatible with diplomatic status and was given 24 hours by the Turkmen authorities to leave the country. The Turkmen authorities suspected the Ambassador of giving refuge to Boris Shikhmuradov, the former Turkmen Minister sought by the Turkmen authorities as the mastermind of an attempted coup d’etat. The diplomatic rift between the countries expanded into a serious confrontation, as Turkmen troops were sent to reinforce the border with Uzbekistan in the Taushauz province. Tensions between the two countries escalated with the closing of the border at most roads and checkpoints between Uzbekistan and Turkmenistan. In the wake of the assassination attempt, it was reported that the Turkmen president refrained from traveling out of the country, ostensibly for fear of continued political instability. The Bukhara summit appeared to indicate that the presidents were putting these events behind them. The meeting, which Turkmen official news sources claim was initiated at the request of the Uzbek president, was devoted to cooperation on key issues of Turkmen-Uzbek border relations, namely, trade, water, energy, and combating crime. At the meeting, the Central Asia leaders reportedly reached an agreement for equitable use of the Kokdumalak gas field, which straddles the border of the two countries. The leaders also announced agreements regarding the use of common water resources. Turkmenistan and Uzbekistan share the waters of the Amu-daria river which forms a large part of the 1,900 km border between the two countries. While the equitable division of the Amu-Daria flow has long been a problem for the two societies, the water problem has grown more severe recently as northern Afghanistan water users have begun to make withdrawals from the Amu-Daria for agriculture. The Central Asian leaders also agreed on simplified procedures for travel of citizens of both countries living in the border zone.

IMPLICATIONS: Official Turkmen sources heralded the meeting as having “significance for the entire world” and claimed that the elite press throughout the world followed the momentous events of the meetings carefully. Apart from the hyperbole of the state-controlled Central Asian press, there was considerable speculation among Central Asian journalists about what issues might have been discussed at the meetings that did not appear in the published accounts. Because the Central Asian summit was conducted privately, we know little about the actual substance of the leaders’ discussions. Some observers felt that the principal goal of the meeting was simply to improve the public perception of the two countries. Other observers speculated that the Turkmen president had arrived in Bukhara with a separate security agenda. There are indications that Turkmen President Niyazov was seeking reciprocal arrangements for extradition of people sought in connection with crimes against the Turkmen state. There were also reports that Turkmen President Niyazov proposed to President Karimov concrete forms of cooperation among the security services, including providing information on the connections of Turkmen residents on Uzbek territory with foreigners. While Turkmenistan has a resource-dependent, export-oriented economy, Uzbekistan has a more diversified economy. Turkmenistan’s substantial natural gas reserves have been the basis of much speculation that the country is a Central Asian “Kuwait of the future.” But Uzbekistan’s gas production exceeded Turkmenistan’s every year since 1994. Turkmenistan’s gas production declined dramatically in 1996 when marketing disputes with Russian intermediaries accounted for a four-fold decline in gas sales. Turkmenistan later reevaluated its gas strategy and returned in 1999 to concentrate on sales through the Russian controlled gas pipelines serving Russia, Ukraine, and other western markets. In April 2003 the Turkmen government signed a 25-year gas marketing agreement with assured deliveries and fixed prices, fixed in terms of cash and in-kind payments. According to the agreements presently in force, the Russian partner is committed to buying 6 billion cubic meters of gas per year through 2005 although gas supplies will fall below that in 2004 due to overloading of the transport system. In the meantime, Turkmen officials are concentrating on changing the terms of the gas supply agreement, boosting the average cost from $44 to $60 per cubic meter. A series of discussions took place in November in Ashgabat in the context of the Turkmen national energy conference. In December 2004 Saparmurad Niyazov met with representatives from Gazprom, Itera, and Naftohaz Ukrayiny to press the case for higher prices. Trans-border problems of trade, water, energy, and combating crime call for greater cooperation of the Central Asian leaders. But these common problems have not been sufficient in the past to bring the Central Asian leaders together in a meeting of the minds. Common goals are not nearly as uniting as common threats. The increased success of Gazprom and United Energy Systems of Russia in making inroads in the energy sector in the countries of the Caspian Basin in the past year has put the Central Asian leaders on alert that they may lose control of the next generation of energy projects to their northern neighbor unless they can agree on common strategies. The Central Asian presidents have concluded that a coordinated strategy is necessary, whatever the differences between the countries.

CONCLUSIONS: Trans-border problems of trade, water, energy, and combating crime were addressed by the Central Asian leaders at the Bukhara summit. But the more important underlying motivation for the rapprochement is continued inability of the Central Asian countries to independently negotiate beneficial agreements with the Russian energy giants controlling access to energy markets in Europe. An enduring thaw in the Turkmen-Uzbek cold war will require more than rhetorical statements of good will on the part of the Presidents. Sometimes it is easier for suspicious parties to work together to avoid something than it is for them to work together to achieve something. The Turkmen and Uzbek presidents have concluded that it is time to put differences aside in favor of more successful strategies for confronting the economic challenges of gaining access to world markets.

AUTHOR’S BIO: Gregory Gleason is Professor of Political Science and Public Administration at the University of New Mexico.

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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