Business & Economics:
RUSSIA RENEWS DIPLOMATIC-ECONOMIC OFFENSIVE IN CENTRAL ASIA
Sergei Blagov: 4/19/06

Russia is pressing ahead with its combined diplomatic-economic offensive in Central Asia. Tajikistan is the latest state to tighten ties with Russia. And next on the Kremlin’s agenda is Kyrgyzstan.

Moscow has followed a predictable pattern in broadening its influence in the region, stressing both security and energy issues. In bringing pressure to bear on Central Asian states, Russia has taken advantage of both its own abundance of natural resources, and its near-monopoly of export pipelines. So far, no Central Asian nation has been able to spurn Moscow’s recent advances. In early April, for example, Russia and Kazakhstan signed agreements covering energy exports and joint projects to develop natural resources. [For background see the Eurasia Insight archive].

Tajikistan’s main resource is water, and Russia is stepping up efforts to develop the Central Asian nation’s hydropower generating capacity. On April 12, Anatoly Chubais, head of the Russian conglomerate Unified Energy Systems (UES), announced that contractors would intensify work to meet the construction deadline for the Sangtuda-1 hydroelectric power station. Construction on Sangtuda-1 started in April 2005, and as of mid-April about 37 percent of the plant had been completed. The power station is scheduled to go into full operation in 2009, with the first unit expected to begin generating electricity in March 2007, Chubais indicated.

At a news conference, Chubais offered praised for Tajik President Imomali Rahmonov’s administration. "We always feel President Rahmonov's constant attention and support on all the issues relating to the construction, from taxes to ongoing tasks," Chubais said. "There are no disagreements and unresolved issues between Tajikistan and UES, but there are a great number of work-related and organizational issues."

UES is spending approximately $500 million to build Sangtuda-1, and the Russian entity will retain a 75 percent share in the power plant, which will generate a projected 2.7 billion kWh of electricity per annum. The power station will have an estimated capacity of 670 MW – enough to meet Tajikistan’s domestic needs and allow for the export of electricity, namely to Afghanistan.

Chubais' trip to Dushanbe followed a major gas deal between Russia and Tajikistan. Alexei Miller, head of the Russian energy giant Gazprom, and Tajik Energy Minister Jurabek Nurmakhmadov signed a memorandum on March 28 to establish an oil-and-gas joint venture. "Initially, we are allocating $6 million from our budget to the joint venture," Miller said, adding that Gazprom would have a controlling stake in the venture. Under the deal, Gazprom is to develop four gas fields: Sarikamysh and Rengan in the west, and Sargazon and Olimtoi in the south.

Meanwhile, Tajik officials and representatives of the Rusal aluminum conglomerate announced April 19 that they would seek World Bank assistance to resolve engineering issues that are hampering construction of the Rogun power plant, a project that dates back to the Soviet era. Rusal, a Russian entity with reportedly close ties to the Kremlin, agreed in 2004 to invest upwards of $1 billion in Rogun’s construction.

Beyond energy issues, Russia and Tajikistan have taken steps in recent weeks to expand trade and security contacts. On April 13, Rahmonov met Sergei Shoigu, head of the Tajik-Russian Inter-governmental Commission for Trade and Economic Cooperation. "Strategic cooperation with Russia remains Tajikistan's foreign policy priority," Rahmonov told Shoigu.

Following the September 11 terrorist tragedy, Tajikistan drifted away from Russia’s geopolitical orbit, and expanded political and economic relations with the United States. Over the last two years, however, Russia has restored its geopolitical dominance over Dushanbe. In October 2004, Russian President Vladimir Putin and Rahmonov signed a series of agreements that enabled Moscow to cement its strategic presence in Tajikistan. In return, Dushanbe obtained debt relief. [For background see the Eurasia Insight archive].

Since then, Russia has steadily tightened its economic hold on Tajikistan. The fact that up to 1 million Tajiks work in Russia as migrant laborers, remitting crucial income to their impoverished homeland, has provided the Kremlin with tremendous negotiating leverage. [For background see the Eurasia Insight archive].

Russia has combined its economic expansion with a strengthening of security ties. In early April, Russian and Tajik military units conducted joint anti-terrorist maneuvers at the Lohur training area, roughly 35 kilometers outside Dushanbe. The three-day exercise was designed to replicate an operation to thwart an attempt by an Islamic militant band to infiltrate Tajikistan from neighboring Afghanistan. Putin and Rahmonov applauded the maneuvers during a telephone discussion April 7, describing them as a milestone in cooperation.

In the coming days, Russian officials will turn their attention toward Kyrgyzstan, as Kyrgyz President Kurmanbek Bakiyev is scheduled to arrive in Moscow on a state visit April 24-25. The Kyrgyz president is due to discuss "specific economic projects,” including the construction of the Kambaratinsk hydropower plant and a natural gas joint venture, the RIA-Novosti news agency quoted Kyrgyz Foreign Ministry spokesman Alikbek Dzhekshenkulov as saying. Putin could also exert pressure on Bakiyev, who is facing rising political opposition at home, to close an American air base in Kyrgyzstan. [For additional information see the Eurasia Insight archive]. Bakiyev said on April 19 that he might order American forces to vacate the air base at Manas, outside the Kyrgyz capital Bishkek, if the US and Kyrgyz governments can not come to terms on a new leasing agreement, RIA-Novosti reported April 19.

Editor’s Note: Sergei Blagov is a Moscow-based specialist in CIS political affairs.