CENTRAL ASIAN RESPONSES TO THE IRAQ CRISIS: HOPES AND FEARS

by Ata Khaitov

Headlines in recent months have been dominated by events surrounding Iraq, pushing into the background the question of Afghanistan, which until recently was of critical importance.

The Central Asian states are each reacting–or not reacting–to these developments in their own way, undoubtedly with an eye on the likely reactions of the world powers.

In contrast to the problem of Afghanistan, there is no practical way that the views of the Central Asian countries can have any bearing on the resolution of the Iraq crisis. But their behavior is an indicator of the balance of power among the leading nations, chiefly between the United States and Russia. The Central Asians are clearly divided between these two opposite poles, by a ratio of one to four. Only one, Uzbekistan, has officially restated its commitment to U.S. policy toward Iraq, in a recent session of the UN Security Council.

It’s all simple and practical…

There is no hint that any of the leaders of these four Asiatic countries has been influenced by feelings of solidarity with the broader Muslim community, or with the Arab world. Nor do they exhibit any particular comprehension of, or commitment to, the laws and principles of the United Nations when taking decisions of this type.

The decisions of Central Asian leaders are in fact being driven by two considerations: to avert any potential danger to their regimes and to minimize the risk of any loss of income. They will therefore support the leading country that offers the best prospect for bringing political and economic benefits. This strategy is tempered only by considerations of how a war might affect their respective economic situations, and by concerns over how events might develop in the future.

KAZAKHSTAN: WITH RUSSIA FOREVER

Kazakhstan, more than any of its neighbors, has no interest in a war in Iraq. As the country with the strongest economy, Kazakhstan is heavily dependent on oil exports. They are the life belt that keeps its still-unstable economy afloat and, most importantly, generates the lion’s share of income for the country’s corrupt ruling elite. The export of energy resources provides up to 50 percent of Kazakhstan’s total currency earnings and forms the basis of its national budget.

In the event of a military operation in Iraq, the subsequent flood of cheap Iraqi oil will likely produce a postwar slump in oil prices. That will deal a sharp blow to Kazakhstan’s economic stability. There is also a substantial risk that Russia, which also relies heavily on oil earnings, will try to cut Kazakhstan’s export quota through the Russian pipeline system, upon which Kazakhstan is almost entirely dependent.

Another likely negative effect for Kazakhstan would be a sharp drop in foreign investment in Kazakhstani oil fields, and possibly its suspension altogether. Postwar Iraq, with its huge oil reserves and low production and transport costs, will be infinitely more attractive than Kazakhstan to investors seeking to maximize profits. There will also be political pressure to rebuild Iraq.

Kazakhstan is extremely interested in foreign investment, with direct foreign capital amounting at present to 7-9 percent of GDP. So war in Iraq represents a serious threat to Kazakhstan’s short and long-term economic prospects–with inevitable consequences for the country’s domestic political stability.

UZBEKISTAN: SELF PRESERVATION

Uzbekistan is in a more difficult position than Kazakhstan, although its concerns are more political than economic. Uzbekistan is trying to solve some challenging domestic problems, largely through its strategic partnership with the United States.

War or no war, Uzbekistan’s economy will remain essentially unaffected, since it does not depend on energy exports or the influx of foreign capital.

Unlike Kazakhstan, Uzbekistan has a relatively complex internal political situation. Radical Islamic movements are gaining in strength despite the government’s efforts, conflict is growing within the government, and the popularity of President Islam Karimov is plummeting. Totalitarian methods of rule are not producing the desired results, and there is a danger that the president will lose control of the situation. Irrespective of what happens in Iraq, conditions in Uzbekistan are likely to deteriorate, and it will be hard to put things right without substantial external support. Only two countries are in a position to help: the United States and Russia. Several years ago, even before the September 11 terrorist attacks, Uzbekistan had opted for Washington as its strategic partner, and it has not changed that view. So Uzbekistan’s position on Iraq is quite clear.

Karimov is counting on the United States, and hopes that his domestic policies will continue to be buttressed by high levels of U.S. support–both economic and political. Last month the Bush Administration asked Congress for US$42 million in aid for Uzbekistan in 2004. That is up from US$31.5 million in aid for the year 2003. (Kyrgyzstan is slated to receive US$40 million and Tajikistan US$35 million in U.S. aid.) But if there is a domestic backlash in Uzbekistan against U.S. actions in Iraq–a backlash that could strengthen radical Islamists at home–then Karimov’s strategy could backfire.

The question arises as to why Uzbekistan is not seeking an alliance with Russia. The reasons are rooted in the not-so-distant past. Within Uzbekistan there is still strong hostility toward Russia as a former imperial ruler. Uzbekistan pulled out of the CIS collective security pact along with Georgia back in 1999, thereby asserting its independence and distancing itself from the old USSR. What is more, Uzbekistan cannot expect from Russia anything like the military and financial aid that it hopes to receive from the United States. Washington, in turn, is relying on Uzbekistan as its most important strategic partner in the region.

This U.S. support is fueling Uzbekistan’s longstanding aspiration to be the dominant state in Central Asia, particularly in the military sphere. (A comparison with Germany in Europe is sometimes made.) This ambition obviously conflicts with Kazakhstan’s goals, and is unwelcome to Russia–although the possibility of a cynical switch in Russia’s position cannot be ruled out, as is evidenced by Moscow’s recent rapprochement with Turkmenistan.

TURKMENISTAN: SILENCE MEANS AGREEMENT–NOW WITH RUSSIA?

Turkmenistan has not yet reacted officially to the prospect of war in Iraq, although it is not hard to guess what that reaction will be. President Saparmurat Niazov (who styles himself “Turkmenbashi”–or father of Turkmens) always gives top priority to preserving the unique totalitarian regime he has created, and to ensuring his personal enrichment. The country’s policies are focused on self-isolation, and on no matter of principle has Turkmenbashi ever expressed any solidarity with the wider Muslim community, even though his country is rich in mosques.

From the economic point of view, military action in Iraq will not have much impact on the economy of Turkmenistan. Any losses from a fall in oil prices can be recovered by increasing natural gas exports to Russia. Those exports account for 75 percent of Turkmenistan’s export earnings. This has been made possible by a deal recently concluded between Turkmenistan and Russia under which Moscow has offered support for Turkmenbashi’s dictatorship in exchange for gas. (See Ata Khaitov, “A new role for Russia,’ Russia and Eurasia Review, vol. 2, no. 3, 4 February 2003.)

Despite an expected slump in world oil prices, Russia can count on a steady demand for natural gas from Europe. But Moscow will have trouble meeting this demand from its own reserves. Cheap gas from Turkmenistan can help Russia preserve an energy balance in its own internal market while also meeting all its foreign export obligations.

Turkmenistan faces little risk of a falloff in foreign investment, since investment from abroad is already at an extremely low level–perhaps 4-5 percent of GDP. Foreign investors have run into many political and legal barriers doing business in Turkmenistan, and the country’s energy strategy, as stated at an oil and gas conference in December 2002, is focused on technology purchases and not attracting foreign capital.

Despite Ashgabat’s official silence on Iraq, the support that Moscow has offered to Niazov means that Turkmenistan can be counted on to follow Moscow’s lead. And if Russia should come out in strong opposition to a war in Iraq, that would not be so bad for Niazov, given the solidarity that he must feel with Saddam Hussein’s embattled regime, which is so like his own.

TAJIKISTAN AND KYRGYZSTAN: BIG BROTHER’S SMALL SATELLITES…

It is chiefly as satellite countries that Tajikistan and Kyrgyzstan have emerged as supporters of Russia on the issue of Iraq. Economically, the two countries have nothing of significance to gain or lose from a war. Both have anemic levels of economic growth, and as energy importers they are not fearful of a fall in world oil prices or shifts in the flow of capital. Should there be war in Iraq, the only negative impact could be a redirection of foreign aid from Central Asia to the Middle East. That would be a significant loss for the two countries. Overseas Development Assistance currently makes up 14.4 percent of Tajikistan’s GDP and 16.5 percent of Kyrgyzstan’s (compared to 1 percent of Kazakhstan’s GDP, 2.4 percent of Uzbekistan’s and 0.7 percent of Turkmenistan’s).

Moreover, these countries have every reason not to support war in Iraq, since war might be condemned by the Tajik and Kyrgyz peoples, and could also increase levels of discontent among Islamic extremists. The two countries are likewise nervous about having a powerful U.S. presence in the region, reasoning that they would rather have an old friend there, for all his faults, than a new one whom they do not always understand. This reasoning explains Kyrgyzstan’s decision to allow Russia to deploy aircraft at the Kant airbase near Bishkek last December as part of the new Collective Security Treaty Organization’s rapid deployment force.

Either way, it ought to be recognized that the impact of the Iraq crisis is likely to result in a win-win situation for both the United States and Russia in Central Asia. That is because the crisis could increase the leverage of Washington and Moscow over the region’s vulnerable rulers. The future status of the United States in the region will depend on how effectively and constructively Washington resolves the Iraq problem. And Russia, it may be said, has already reaped some of the benefits resulting from the uncertainties emanating from the crisis.

Ata Khaitov is an independent observer of Central Asian affairs.