EurasiaNet Eurasia Insight - Paper Says Central Asian Price Hikes Give Russia Chance To Increase Influence

EURASIA INSIGHT

PAPER SAYS CENTRAL ASIAN PRICE HIKES GIVE RUSSIA CHANCE TO INCREASE INFLUENCE
9/25/07
A EurasiaNet Partner Post from BBC Monitoring

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Excerpt from article by Viktoria Panfilova: "Central Asia on verge of hunger riots; Russia has chance of becoming food basket for countries of the region" (Internet Version -WWW) published by Russian newspaper Nezavisimaya Gazeta on 11 September

Russia has a chance to become the food basket for countries of the region.

Prices on bread and all other foodstuffs are rapidly growing in Central Asia. The reason is the poor harvest and the increase in cost of wheat imported from Russia and Kazakhstan. Experts fear that the food crisis in the Central Asian region may grow into a political crisis.

The catalyst for the critical tension in the countries of Central Asia may become the main grain supplier - Kazakhstan, which has announced the sale of wheat to its neighbours at world prices. Previously, this had been done on preferential conditions. Another influential player in the region - Russia - may provide aid, for example, to those same Kyrgystan and Tajikistan, not without compensation, but in exchange for strengthening its positions in Central Asia. Otherwise, others will do this for it. Dissatisfaction with the increased prices is being seen today in all the countries of Central Asia. They themselves grow wheat, but only in insignificant amounts. This year, there has been very little grain due to the draught. Hope for aid from Kazakhstan grows dim, if we consider the fact that Astana intends to sell its grain on the world market, where prices have significantly increased. "Whether it wants to or not, Kazakhstan may become the detonator for increased social tensio! n in the region," Director of the Risk Appraisal Group Dosym Satpayev told Nezavisimaya Gazeta.

Of all the countries in the Central Asian region, Kyrgyzstan has been the most greatly affected. There has been a bread shortage there for several months now. Prime Minister Azimbek Atambayev was forced to sign an edict on unblocking the state reserve in order to stabilize prices on flour and bread and bakery goods. However, he was not able to reduce them. For this reason alone, 450,000 people out of the 5-million man population found themselves below the poverty level. Meanwhile, the government is discussing the repeal of unemployment subsidies: The budget, 60 per cent of which goes for various social payments, can no longer withstand them. The opposition may make use of the social tension in Kyrgyzstan, and has promised to renew protest actions in the Fall. In connection with this, local analysts are predicting "big political shake-ups," up to the dismissal of government and early parliamentary elections.

The main peculiarity of the new political season in Kyrgyzstan, as Chairman of the Association of Political Analysts Nur Omarov told Nezavisimaya Gazeta, consists of the fact that "exacerbation of the situation will be associated not with a struggle for power, but with the need to solve pressing everyday problems." In connection with this, the possible departure of Prime Minister Atambayev from his post is being actively discussed. "The resignation may happen at the end of September -beginning of October," said Omarov.

In Tajikistan in August alone, prices on food products took a drastic leap. As the chief editor of the newspaper, Aziya Plus, Marat Mamadshoyev, told Nezavisimaya Gazeta, "as long as there is light and gas in the republic, the people will be patient, but it is hard to predict what will happen when the cold comes."

Even in Turkmenistan under Turkmenbashi, the population periodically expressed dissatisfaction. Today, the situation is not as difficult here as it is in Kyrgyzstan and Tajikistan, but there is a notable worsening tendency.

In Uzbekistan, the rapid increase in prices on food products has already evoked protest actions in the Fergansk Valley. The authorities tried to hold down prices by administrative methods, but achieved exactly the opposite effect - the merchants began to complain. Considering the fact that the presidential elections are scheduled in the country for December, the situation is more than difficult. "If the food crisis spins out of control, there is a high probability that Russia will provide aid to Uzbekistan," Director of the Central Asia and Kazakhstan Department of the CIS Countries Institute Andrey Grozin told Nezavisimaya Gazeta. In his words, Russia may approach the question of providing aid to the countries of Central Asia in a differentiated manner. "It will all depend on the price of the question," believes Grozin, presuming counter-offers by the Central Asian states to Moscow.

But Tajikistan need not count on Moscow’s benevolence. "After Dushanbe annulled the contract with RUSAL in unilateral order, we can hardly expect that Tajikistan will get any significant aid from Russia in overcoming the food crisis," the expert believes.

The president of the Foundation for Eastern Studies, MGIMO [Moscow State Institute of International Relations] Professor Sergey Luzyanin, believes that Russia may be hindered from using the situation in Central Asia in its own interests by the static bureaucratic machine. "While it is gearing up, China - which quickly and perceptively reacts to the slightest changes in the region - will hasten to provide aid to the states of Central Asia. So as not to allow a strengthening of China’s influence to the detriment of its own, Russia must resolve the questions of providing aid in an effective manner," Luzyanin told Nezavisimaya Gazeta. Otherwise, in his opinion, there may be a repetition of the story of the Caspian gas pipeline: While Russia is performing long drawn-out computations of the project, Beijing is already celebrating success. Construction of the gas pipeline from Turkmenistan to China began in August.

The present-day situation with the growing shortage of grain and of foodstuffs in general in Central Asia is creating a strategic opportunity for Russia to become the food basket for countries of the region. Russian agriculture survived with minimal support of the state.

[Passage omitted]

And so, Russian agriculture, which has survived in Spartan conditions, is getting the opportunity to develop successfully with the support of the state, among others, and with access to new sales markets. The almost 100 million people of the Central Asian countries constitute a worthy market for Russian companies. Energetic actions by the Russian authorities are needed so as to make use of the situation that has arisen on the food market of the Central Asian countries in our own interests. In the interests of Russian business. In the interests of creating new jobs. And the creation of guaranteed markets for sale of products is the best national project.

Editor�s Note: Source: Nezavisimaya Gazeta, Moscow, in Russian 11 Sep 07

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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