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Paris, Friday, May 5, 2000

Countries in Central Asia Try To Avoid a New Great Game

By Philip Bowring International Herald Tribune.
ALMATY, Kazakhstan - Nearly a decade after the dissolution of the Russian empire, the landlocked states of Central Asia are searching for a better balance in their relationships with their immediate neighbors, the West and each other.

Developments elsewhere - in Russia, in Iran and in energy prices - are giving them an opportunity to leverage their geopolitical importance more successfully than they have up to now. But inadequate mutual cooperation on practical and economic issues is exacerbating the tyranny of distance from which they all suffer.

This part of the world should really be called Central Eurasia, as its historical and cultural links are more with the Slav lands to the west and north and Turkic and Persian ones to the south and southwest than to East or South Asia. Here in Almaty, China is little more than 160 kilometers (100 miles) away, but traveling to London or Frankfurt, let alone Istanbul or Moscow, is much easier than to Hong Kong or Tokyo.

Trade links to China (and Korea) are growing, and Kazakhstan hopes that a relationship with Beijing can enlarge its diplomatic options. Selling energy to China is a possibility, but Kazkhstan is going to have to find a lot more oil or gas than it has so far to justify a pipeline from the Caspian to users 4,800 kilometers away in northern China.

These countries will continue to think first about their relations with Russia, the West, Turkey and Iran, and on several fronts the picture has been changing.

The emergence of President-elect Vladimir Putin has given greater cohesion in pursuit of national interest to Russian policy. That is not necessarily bad for Central Asia, which wants to continue to reduce economic dependence on its former master but also needs Russia to be actively cooperative rather than sulky or disorganized.

Meanwhile, Russia itself is having to take note of the re-emergence of Iran as a competitor for providing outlets for energy. Russia is now showing more flexibility in dealing with Central Asian producers who are dependent on its pipelines, especially for gas.

Kazakhstan will be using a new pipeline through Russia to the Black Sea to export oil from its Tengiz field. But if there are more big finds, the Iran and (less likely) Chinese options will be available. Prospects appear increasingly bright that the Kashagan field being evaluated by a major consortium will be significant.

The improved prospect of the Iran option has probably killed U.S.-backed plans for trans-Caspian routes bypassing both Russia and Iran and going via Azerbaijan and Georgia to the Black Sea or on through Turkey to the Mediterranean.

Meanwhile, big gas discoveries in Azerbaijan are bad news for Turkmenistan, which wants to sell its gas to Turkey via either Iran or the Caspian.

Developments could be seen as a setback for U.S. policy. The United States has been very supportive of the Central Asian states. They needed to reduce dependence on Russia, and it needed to enlarge its influence in the region.

But the Kazakhs have become irritated by the dominance of the Iran question in U.S. policy, which many believe has been contrary to their interests. Nor do they like being viewed as pawns in a new Great Game in Central Asia.

Uzbekistan is stubbornly clinging to nonmarket economics. And the region's autocratic leaders have also been irritated by Secretary of State Madeleine Albright's lectures on democracy. So while paying lip service to liberal democracy, they are finding more common ground with Russia and China.

These states still look largely to the West for investment and trade. The Kazakhs badly need the American oil companies. But overexpectations on both sides led to disappointments. There was no quick bonanza for investors, and the West could not provide a quick fix for stumbling economies. They must now exploit opportunities in different directions.

That, of course, includes mutual help, creating regional links and economies of scale. Small market economies surrounded by walls are likely to end up perhaps even worse off than being plugged into a creaky socialist system.

Economic reform, privatization and fiscal discipline continue to progress in some countries, including Kazakhstan. But in Uzbekistan, which is populous and fertile and should be wealthy, they have moved into reverse. Uzbek currency and trade controls have badly damaged regional trade, and President Islam Karimov's government now wants to introduce visas for neighbors.

Most of the countries can agree on security issues, notably combating Islamic fundamentalism. But numerous regional and bilateral trade and cooperation pacts remain pieces of paper that are waved about by leaders but in practice are frustrated by old bureaucratic processes and new nationalism.

With regionalism making slow progress, if Kazakhstan is to avoid marginalization, it will have to play its energy and geopolitical cards well and without sentiment. But for now most external events are moving in its favor.