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EURASIA INSIGHT

RUSSIA WARY ABOUT UZBEKISTAN’S GEOPOLITICAL INTENTIONS
Sergei Blagov 2/06/08

Alarmed by signs that Uzbekistan is interested in a rapprochement with the United States and European Union, Russian President Vladimir Putin announced that Uzbek leader Islam Karimov would be making a hastily arranged visit to Moscow. When that trip ended on February 6, Putin had yet to hear Karimov make a clear-cut declaration of fealty to Moscow. Instead, the visit featured mainly general statements about the benefits of cooperation.

For much of the last three years, Uzbekistan has been firmly in Russia’s geopolitical camp. However, in recent months, there have been numerous indicators that a thaw in US/EU-Uzbek relations is in the offing, highlighted by the late January visit of Adm. William Fallon, the chief of the US Central Command. [For background see the Eurasia Insight archive].

On January 30, just days after Fallon’s visit, Putin telephoned Karimov, ostensibly to convey 70th birthday greetings. Shortly after that conversation, though, the Russian presidential website was breaking the news that Karimov would be making a visit to the Kremlin. The Uzbek leader’s trip occurred only a week after it was announced, a nanosecond in diplomatic time.

Following Karimov’s February 5-6 visit, Putin attempted to portray the Russian-Uzbek relationship as so solid that US attempts to make inroads into Tashkent would prove futile. For the first half of this decade, Washington and Tashkent were close strategic partners, but they had a falling out over the Karimov administration’s response to the Andijan events of 2005. In the wake of Andijan, Tashkent made a geopolitical u-turn toward Moscow.

Putin characterized the February 6 talks as a "fruitful political dialogue." Noting that annual bilateral trade experienced 40 percent growth in 2007 over the previous year, the Russian president went on to assert that close economic ties were a "sign that our relations are going to develop further, as they have been developing in the previous years."

"We confirmed that relations between Uzbekistan and Russia reached its highest point and have the quality of an alliance," Putin added.

Karimov did not pick up on Putin’s talk about an alliance. Instead, the Uzbek leader expressed "Uzbekistan’s highest respect for Russia," and made references to expanding "multifaceted cooperation."

The results of the visit on paper were not as impressive as the presidential rhetoric. Russian and Uzbek officials ended up signing mainly ceremonial agreements with little political substance to them.

In the most significant deal, Russia’s United Aircraft Corporation obtained a majority stake in Tashkent’s aircraft manufacturing plant, where Ilyushin-76 military transports and Il-114 civilian liners are assembled, Russia’s RIA-Novosti news agency reported. Terms of the deal were not disclosed.

It’s not as if the Russian company is acquiring a lucrative asset, though. The plant has been financially ailing for years, and will likely require heavy subsidization for many more years to come before turning a profit, if ever. In 2006, the plant reported a loss of $4.4 million, with export sales experiencing a precipitous decline, from $67.5 million in 2005 to a mere $16 million in 2006. The Tashkent plant’s debts were also estimated to be over three times its net worth, which was estimated at $26 million, according to the Interfax AVN news agency. On the surface, then, it seems as if Karimov unloaded an albatross on Russia.

By far the most important topics on Karimov’s agenda were energy and security. He wants to get the most out of Uzbekistan’s not insignificant reserves of natural gas, and he desperately desires regional stability, which, in turn, requires the containment of Islamic radicals active in Central Asia, especially in Afghanistan and Pakistan.

Russia, of course, has a lot to offer in the field of energy cooperation. Under terms of a 2006 pact, the Russian and Uzbek state energy conglomerates, Gazprom and Uzbekneftegaz, have undertaken joint exploration and development efforts in Uzbekistan. One such project, involving fields in the Ustyurt plateau, could yield up to 5 billion cubic meters of gas annually. Gazprom has also reportedly pledged to invest some $250 million to explore additional deposits in the Ustyurt region and $350 million to develop the Akchalak, Kuanysh and Urga fields by 2011. The Russian entity also aims to develop Shakhpaty gas deposit.

Meanwhile a Production Sharing Agreement signed in 2007 between Uzbekneftegaz and Soyuzneftegaz Vostok Ltd, a fully owned subsidiary of Russia’s Soyuzneftegaz, is guiding the 5-year joint exploration, and 36-year joint development of Central Ustyurt and South-Western Guissar hydrocarbon deposits. The Russian company has pledged to invest $466 million, including $370 million in the first three years.

Putin’s possible trump card is the planned expansion of the Prikaspiisky Pipeline. [For background see the Eurasia Insight archive]. If completed, the Prikaspiisky route could give Russia a tremendous advantage in the Caspian Basin energy game. Yet, despite the fact the relevant documents have been signed, completion of the project is by no means assured at this stage. All Putin and Karimov could do in Moscow was to, in the Russian president’s words, reaffirm mutual "interest in implementing agreements to swiftly modernize the natural gas transportation infrastructure in the Central Asian region," RIA-Novosti reported.

What Putin can offer Karimov in the security realm is more difficult to discern, especially concerning efforts to stem the increase in Islamic radical activity in Afghanistan and Pakistan. It is in this sphere that the United States would seem to be Karimov’s best bet. Washington could also potentially offer Tashkent attractive energy development and export alternatives, especially if US officials manage to finesse the construction of a Trans-Caspian Pipeline. [For background see the Eurasia Insight archive].

Analysts in Moscow believe the Russian government’s continued efforts to develop economic ties with Uzbekistan are aimed at forestalling Tashkent’s possible geopolitical drift back toward the United States. It remains to be seen whether the Kremlin is able and willing to meet Karimov’s price for loyalty.

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

The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues.

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