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A Russian Comeback To Central Asia More Than A Pipe Dream

The old Central Asia-Center pipeline that supplies Russia with gas is badly worn out. In 2006, the pipe pumped a little more than 41 billion cubic meters of gas. By comparison, in the Soviet times, the relevant figure was 85 billion.
by Mikhail Pereplesnin
Moscow (RIA Novosti) May 10, 2007
When Vladimir Putin became president seven years ago, he made a blitz tour of post-Soviet Central Asia. One of the problems he inherited from Boris Yeltsin was lack of proper relations with the former "fraternal" Central Asian republics, which had become members of the Commonwealth of Independent States (CIS).

The niche voluntarily vacated by Russia did not remain empty for a long time. Central Asian republics were showered with cooperation proposals from all kinds of investors - Turkey, Iran, Arab states, China, Japan and Indonesia. The Americans hastened to proclaim the Caspian a zone of their vital interests. Even Ukraine left Russia far behind in trade with Turkmenistan.

Ashgabat managed to stick to the wait-and-see attitude and avoid choosing a strategic partner during numerous Turkmen visits by wanted and unwanted guests that were rushing to divide the Caspian pie. With many reservations, Putin's trip to Ashgabat seven years ago can be qualified as an attempt at comeback - Russia had lost many good opportunities, and economic cooperation was reduced to the purchase of Turkmen gas in tough competition with Ukraine. However, it was during that visit that a new round of top level meetings was launched.

Putin's current visit to Ashgabat will be inevitably analyzed in the historic context as the summing up of his activities in Central Asia. Let's count its pluses and minuses.

The main plus is that Russia has finally got rid of its imperial ambitions towards a former constituent province. A flexible and gradual increase in prices on imported Turkmen gas allowed it to edge out its Ukrainian rivals and sign in 2003 a long-term agreement (valid until 2028) on the purchase of almost all Turkmen gas exports with the exception of 5-7 billion cubic meters that are annually pumped into northern Iran. Moreover, the monopoly position allowed Moscow to derive not only economic but also geopolitical gains by reselling gas to Ukraine.

The biggest minus is that the old Central Asia-Center pipeline that supplies Russia with gas is badly worn out. In 2006, the pipe pumped a little more than 41 billion cubic meters of gas. By comparison, in the Soviet times, the relevant figure was 85 billion.

The second plus of Moscow's efforts to upgrade its economic presence in the region is expansion of markets for Russian businesses and introduction of domestic technologies. Ashgabat visits by regional business delegations have become Russia's foreign policy know-how. St. Petersburg Governor Valentina Matviyenko came to the Turkmen capital with the leading businessmen from her region, while Sverdlovsk Governor Eduard Rossel arrived with their colleagues from the Urals. Direct contacts between producers and consumers have given a considerable impetus to bilateral trade. In the past year, it reached $307.5 million, an almost double increase compared to 10 years ago.

Trade could have been even bigger if Russia risked direct investment in the Turkmen economy instead of limiting itself to strictly commercial relations. At one time, Turkmenistan offered Gazprom a very promising project - exclusive rights to the exploration and industrial development of gas deposits in the Amudarya's right bank. Ashgabat patiently waited for several years for Gazprom to make a decision. Eventually, it offered the project to the Chinese. With a view to future profits, they quickly signed the agreement, showing more flexibility than Russia's gas monopoly.

Japanese, Turkish, Ukrainian and many West European companies have already made investment in the Turkmen economy - processing of agricultural produce, capital construction, and oil production and refinery. Russian companies have just appeared there. This delay is an obvious minus.

Russia has even fewer achievements in the cultural and social spheres. During the recent Moscow visit of President Gurbanguly Berdymuhammedov it transpired that Russian education technologies were in high demand in Turkmenistan. Turkmenistan has only one Russian-Turkmen general education school. It is more difficult to get into it than into a prestigious college.

The Russian drama theater is also on the Turkmen government payroll. Moscow's long-standing plans to pay for it and create a Russian cultural center on its basis have remained on paper. But humanitarian contacts are secondary to economic relations. If Russia wants to restore its positions in this dynamic region, it should consider big joint projects such as development of hydrocarbon reserves on the Turkmen part of the Caspian shelf and construction of pipelines to link Turkmenistan with Russia "as a crow flies" - along Kazakhstan's eastern Caspian coast.

The itinerary of Putin's current trip shows that the political ground for promising long-term tripartite projects is ready. If the Russian, Kazakh and Turkmen presidents decide to build a railway or a gas pipeline on the Caspian eastern coast (preferably both), they will determine the direction of Central Asia's economic and political development for years ahead. In this case, Vladimir Putin will crown his presidency with a major achievement.

Mikhail Pereplesnin is editor-in-chief of the Russian analytical magazine Turkmenistan.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

Source: RIA Novosti

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China Taps North Korea Resources
Seoul (UPI) May 04, 2007
China has sharply expanded its business ventures in North Korea in recent years, tapping into the country's natural resources as it seeks to boost its leverage over the communist state, South Korea's state-run think tank says. What's more, China will exploit its impoverished neighbor further in future -- Beijing sees Pyongyang as a potential part of its northeastern area, bordering Russia or Mongolia, the research institute run by the Korea Development Bank opined.

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