Caspian Basin: As Energy Prices Head North, Democratization Goes South

Caspian Sea basin: rich in oil, poor in democracy? (Photo: Dean C.K. Cox)

Workers with Azerbaijan's state energy company SOCAR prepare a new oil drill on a field outside the nation's capital, Baku. Two decades after the Soviet breakup, the Caspian is reaping the profits of more than 1.5 million barrels a day of oil exports. (Photo: Dean C.K. Cox)

Quiz: Over the next three months, three former Soviet republics will hold elections – Kazakhstan, Turkmenistan and Russia. Whose official outcome will most closely resemble the truth?  

If you replied Russia's upcoming presidential election, you are correct, which, given the apparent scale of fraud in its December 4 Duma vote, says much about politics on the Caspian Sea oil patch: While Vladimir Putin reluctantly permitted a large election protest in Moscow – and may face more in the coming weeks – the popular will is likely to play almost no role in the voting along Russia’s southern rim. Instead, the rulers of these self-styled sultanates, courted by the West since the 1990s for their hydrocarbons and geostrategic location, will declare outsized victories for their chosen candidates, unruffled by the turbulence that has terrified petrocrats elsewhere.  

The rulers of this stretch of land seem to think they will simply hang on. One is led to conclude that they may be right, given the region’s history. Yet, their gamble is considerable – that the influences of the outside world, held at bay for so many centuries, will remain far, far away. 

Two decades after the Soviet breakup, the Caspian is reaping the profits of more than 1.5 million barrels a day of oil exports. It is one of China’s choice suppliers of natural gas. And it is an increasingly crucial military staging ground for the United States, which originally embraced the republics in order to direct their oil and gas through new pipelines to the West, and now to facilitate the shipment of war supplies to Afghanistan. Judging by the rulers’ behavior, this trifecta of factors has helped to make them feel insulated from the political and economic trends pushing and pulling the rest of the world. While the Arab Spring has persuaded even Saudi Arabia to shower $130 billion in added payouts on its population as insurance against unrest, the rulers of Kazakhstan and Turkmenistan, along with Azerbaijan and Uzbekistan, have more or less gone about their usual business. 

Which is what? A drive through central Baku – the capital of Azerbaijan – reveals a sparkling horizon of luxury apartment houses, ultra-modern office complexes and posh hotels, most of them built by a tight and powerful clutch of wealthy clans that include and surround the family of President Ilham Aliyev. In Kazakhstan, Timur Kulibayev, the billionaire son-in-law of President Nursultan Nazarbayev, has grown from dominating the oil sector to directing two-thirds of the entire economy through Samruk-Kazyna, a state-run investment fund that owns or controls the nation’s biggest industries. 

Gulnara and Lola Karimova, the daughters of Uzbekistan’s president, have become wealthy through control of key businesses in the country. And Turkmenistan President Gurbanguly Berdymukhamedov presides over a country that, according to Transparency International, is tied with Uzbekistan as the fifth most-corrupt of the 183 nations evaluated in the organization’s most recent survey. Berdymukhamedov is Turkmenistan’s sole decision-maker five years after succeeding Saparmurat Niyazov.  

If they are immune from some maladies, the republics are still subject to at least one of the worst – terrorism. Oddly, Kazakhstan – the region’s most prosperous state, with the broadest middle class, the mildest autocrat and the most open approach to religion – has faced the greatest violence this year. Since May, some 30 people have died in seven suicide, shooting and bombing attacks. The source of the mysterious trouble is not clear, although Kazakh security officials link it to Afghanistan and Pakistan. By comparison, Uzbekistan, where one has expected increasing trouble, has been relatively calm.  

The leaders of Kazakhstan and Uzbekistan have exhibited contrasting styles: President Nazarbayev has sought conciliation, jailing opponents only if they fail to yield to him, while Uzbekistan President Islam Karimov has embraced unapologetic brutality. There are similarities – they have led their respective republics for the entire post-Soviet period, and neither suggests any readiness to set in motion a leadership transition. On the latter point – the disinclination to move on – Azerbaijan’s Ilham Aliyev and Turkmenistan’s Berdymukhamedov also seem rather comfortable in their respective palaces.  

Looping back to the original point, are these four leaders in fact safely screened off from the type of outside events that could challenge their rule? On the positive side of the ledger, all have proven good at balancing the highly ambitious forces in their countries, and doling out the spoils of hydrocarbon and mining wealth. None of their republics seems to suffer the social cracks that elsewhere have prefigured political instability.  

Yet, one wonders how deeply any has thought through the risk. One comforting factor must be the safety of distance – Tunisia and Libya seem a long way away. But Moscow is less so, and therein one might become disquieted. One is reminded of the source of the last couple of disruptions to this remote region’s tranquility – first in 1917, then in 1991.   

Editor's note: 
Steve LeVine is a contributing editor at Foreign Policy, and the author of The Oil and the Glory, a history of the post-Soviet oil rush on the Caspian Sea. LeVine was based in Central Asia and the Caucasus for 11 years, reporting for the Wall Street Journal and before that The New York Times. He is an adjunct professor in energy security at Georgetown University, and a Schwartz Fellow at the New America Foundation in Washington, D.C.