Central Asia: Kazakh, Tajik Presidents Show Oil And Water Do Mix

In return for closer ties with Kazakhstan, visiting Tajik President Imomali Rahmon has hinted at support for a Kazakh plan to form a Central Asian Union -- an idea also backed by Kyrgyzstan but soundly rejected by Astana's main regional rival, Uzbekistan, and unlikely to please Russia.

Rahmon offered his upbeat appraisal during a visit to the Kazakh capital this week to "improve bilateral ties," including to seek economic help from his oil-rich neighbor.

The agreements that Rahmon signed with President Nursultan Nazarbaev, and the plans about which the two leaders spoke, could signal a new regional alignment at the expense of Russian and Uzbek influence in Central Asia.

President Nazarbaev has long sought greater influence for his country, but appears to have stepped up the effort recently.

More than a decade and a half after the Soviet Union collapsed, Kazakhstan is emerging as a regional power in at least several areas. The money from its oil industry, just now starting to produce in large quantities, gives Astana the kind of revenues that its Central Asian neighbors can hardly imagine. Its banks are among the region's pioneers in tapping foreign stock markets. Kazakhstan is also investing in other countries in Europe and Asia, but also closer to home in Kyrgyzstan and Tajikistan, where Kazakh companies own shares in banks and various industries.

With wealth comes prestige. In 2010, Kazakhstan will assume the rotating presidency of the Organization for Security and Cooperation in Europe (OSCE), raising Astana's international clout.

So it is no surprise that Rahmon - whose poor, agrarian country just endured one of its worst winters in decades -- came to his northern neighbor for help. At a news conference with Rahmon in Astana on May 13, that is precisely what Nazarbaev said he would give Tajikistan.

"Today, we agreed on quickly launching a Kazakh-Tajik investment fund," Nazarbaev said. "The Kazakh side will put $100 million into the fund, which will realize projects on the territory of Tajikistan and joint projects."

Hydroelectric Hopes

He added, without elaborating, that Kazakhstan would provide other help to Tajikistan in coming weeks. But it was Nazarbaev's remarks about the longer-term that indicated Kazakhstan has ambitious plans for eastern Central Asia.

"We are interested in the hydroelectric resources of Tajikistan," Nazarbaev said. "Today, we agreed that if a consortium will work on the Rogun hydroelectric power station, then Kazakhstan will take part, providing materials, helping with shares [in the consortium] and as investors. We are also interested in other hydroelectric power plants; we are interested in constructing lines to carry hydroelectricity through Kyrgyzstan to Kazakhstan in order to purchase hydroelectricity from your country."

Kyrgyzstan and Tajikistan currently depend on Uzbekistan for natural-gas supplies, and Uzbekistan has shown that it is serious about payment deadlines.

Supplies to Kyrgyzstan and Tajikistan are regularly cut off, even in the winter, over bills that amount to under $3 million. Southern Kazakhstan also depends on Uzbek gas, so Kazakh authorities are sympathetic to Kyrgyzstan and Tajikistan's problems.

Uzbekistan has a virtual monopoly on energy supplies to its eastern neighbors. Perhaps unsurprisingly, it has never shown much interest in helping Kyrgyzstan or Tajikistan develop their vast hydroelectric potential.

Nazarbaev's proposed electricity route skirts Uzbekistan, where the land is more level and better suited to constructing power lines. Instead, it would traverse much more difficult terrain -- the Pamir and Tien-Shan mountains -- to reach Kazakhstan.

"One of the most important projects for our future cooperation is the energy sphere, where we also reached concrete agreements," Nazarbaev said in an allusion to the plan. "In particular, Kazakh investment will be directed toward the construction of a hydroelectric power station (Rogun) in central Tajikistan."

Until the end of last year, Russia's RusAl had a contract to build that station. But disputes between the company and Tajik authorities over the size of the dam for the station led to an annulment of the contract.

Preferred Customer?

Kazakhstan, with a keen eye on its own interests, is now offering financial help.

Kazakhstan is also seeking to invest in hydroelectric projects in Kyrgyzstan, another country where Russian businesses seemed until recently to have locked down projects on Kyrgyz and Tajik rivers that are the source of most of Central Asia's water.

Rahmon received a vague promise about Kazakhstan helping to alleviate a food supply problem that Tajikistan is almost certain to suffer in the coming months. Tajikistan's herds and winter crops were devastated by long periods of sub-freezing weather this winter. Snow that piled high in the mountains during those months will soon be causing floods as it melts. Adding to this problem is the worldwide shortage of basic foods, which prompted Kazakhstan to announce a ban on grain exports until September 1 to protect its own citizens.

Nazarbaev appeared moved by Rahmon's appeal for an exception to Astana's grain export ban, but the Kazakh president kept his offer modest. "We are interested in providing [wheat] to Tajikistan, our neighbor, and of course in the soonest possible time we will. I discussed this with [Rahmon] earlier," the Kazakh president said. "Now our ban [on grain exports] lasts until the new harvest, until the first of September, but naturally then we will provide Tajikistan, first of all, with wheat."

Rahmon also asked for Kazakhstan's help in training and equipping Tajik border guards along Tajikistan's border with Afghanistan, Central Asia's first line of defense against narcotics trafficking.

Since Kazakhstan's first year of independence, Nazarbaev has had a vision of a "Eurasian Belt" -- a regional alliance or union of some type. Central Asian states have tried on several occasions to create such a regional organization but without any lasting success.

Nazarbaev is once again proposing the idea of a Central Asian union. Kyrgyz President Kurmanbek Bakiev visited Kazakhstan in the second half of April and said his country supported the plan. Less than a week later, Uzbek President Karimov -- Nazarbaev's rival vying for regional leadership since independence in 1991 -- visited Kazakhstan and said Tashkent was not at all interested in being a member of such a grouping.

But with both Dushanbe and Bishkek standing to benefit from Kazakh aid and other preferential treatment, Astana's bid to boost its leadership role in Central Asia appears to be moving forward without the Uzbek president-for-life.