NATURAL RESOURCES ARE BEING USED AS POLITICAL TRUMP CARDS

By Sadji

The problem of the utilization of natural resources in Central Asia has recently become increasingly acute. This issue is engendering disagreements between the independent states that may eventually lead to political conflict if they are not resolved quickly. Current developments in relations between Uzbekistan and Kyrgyzstan provide a clear example of how the artificial regulation of supplies of natural energy resources is being used as a way of applying political pressure.

Between January 25 and March 1, no natural gas was supplied by Uzbekistan to Bishkek and Chu Oblast. In an effort to reassure the public, the prime minister’s press office announced that the head of the Kyrgyz government Kurmanbek Bakiev was maintaining regular telephone contact with his Uzbek counterpart in order to sort the problem out.

On January 30, the legislative assembly debated the issue of gas supplies to the northern regions, and described the situation as critical. The director of the state-owned Kyrgyzgaz, Turgunbek Kulmurzaev, told the session that the disruption in supplies of natural gas from Uzbekistan was due to a fault in the pipeline in Bukhara Oblast, and that there were no political implications. He said that supplies would resume within a week, as soon as the country had paid off its debts. As of January 25, Kyrgyzstan owed Uzbekistan US$500,000 in cash and another US$4.9 million in kind. While there were no gas supplies from Uzbekistan, Kyrgyzstan received 58,000 m3 of blue gas per hour from southern Kazakhstan. Of this, 40,000 m3 was supplied to the Bishkek heating and power plant, 12,000 m3 was earmarked for Bishkek residents and 6,000 m3 was distributed around Chu Oblast. In winter the northern regions of the country require between 150,000 and 200,000 m3 per hour. However, some legislators and analysts believe that the problem may have political overtones, because gas supplies from Uzbekistan decreased dramatically on December 31, immediately after changes were made in the composition of the Kyrgyz government, and stopped completely on January 25, just before negotiations began on the delimitation of the border with Uzbekistan. The theory of a political subtext to Uzbekistan’s “gas attack” on Kyrgyzstan seems more plausible. And if one takes into consideration legislative assembly member Dooronbek Sadyrbaev’s report that Uzbek President Islam Karimov had said on national television that there was no fault in Bukhara Oblast, then one can say with complete certainty that a valve in the pipeline was being used to apply political pressure to Kyrgyzstan.

The Kyrgyz authorities then began to play their own trump cards. For example, the authorities in Batken Oblast declared that Uzbekistan owed Kyrgyzstan about US$180 million in rent for the land it was using for its oil wells. Articles began to appear in the governmental press reporting that because of the lack of gas Kyrgyzstan was using more electricity. As a consequence, water from the reservoirs was also being consumed in greater quantities than usual: In the first two weeks Kyrgyzstan had already used 200 million m3 of “excess” water. This means that in summer at least two regions of Uzbekistan will be without water and will miss out on their traditional bumper harvests of early fruit and vegetables. Alarmed at this turn of events, President Karimov was obliged to send his prime minister, Utkir Sultanov, to Bishkek. Negotiations between the two prime ministers took place behind closed doors, but they resulted in a resumption of gas supplies in early March. Despite the positive outcome on the gas question, the Kyrgyz government announced, through the director of Kyrgyzenergo B. Sartkaziev, that this year Uzbekistan would only receive 700 million of the planned 2.3 billion m3 of water. Thus Islam Karimov, who likes to use aggressive methods to solve political problems, was hit by a boomerang that might inflict considerable damage on the Uzbek economy. This, incidentally, is the second boomerang to damage Karimov’s authority since independence. The first was when Karimov unleashed a terror campaign against the opposition within his country, resulting in brigades of the Islamic Movement of Uzbekistan being set up abroad to challenge his authority by means of terrorist attacks.

AKAEV MAKES A TACTICAL ERROR

At a parliamentary session on February 20 Prime Minister Kurmanbek Bakiev made a statement about the gas situation. He said that one of the reasons for the problem was that Kyrgyzgaz had yet to sign a supply contract with Uzbekistan. According to Bakiev, only one agreement had been signed–on supplies of gas to the Bishkek heating and power plant. Kyrgyzstan usually has two gas contracts with Uzbekistan: one on supplying the Bishkek plant in exchange for electricity supplies, and one on supplying Kyrgyz consumers for a set fee.

But the prime minister’s words clearly contradicted recent government statements. On December 6, 2000, it was announced that on December 5 the deputy prime ministers of Kyrgyzstan and Uzbekistan, Esengul Omuraliev and Rustam Yunusov, had signed an intergovernmental agreement on the joint use of energy and water resources. Under this agreement, Uzbekistan agreed to supply 700 million m3 of natural gas to the two heating and power plants in Bishkek and Osh in 2001. In addition to this, another 525 million m3 of gas was to be supplied for public consumption. Furthermore, the price for the gas was reduced to US$42 per thousand m3–much lower than previous prices–and Kyrgyzstan could pay for half the gas in consumer goods. Before this, in September last year, the prime minister of the previous Kyrgyz government, Amangeldi Muraliev, visited Tashkent and held talks on future economic cooperation. However, both Muraliev and Omuraliev were removed from their posts in late December. It is difficult to believe that both officials were Karimov’s special agents in the Kyrgyz parliament. The reason for the contradiction in the prime minister’s answer lies elsewhere.

In market conditions, trade has become the norm between Central Asian countries, and each country seeks to benefit from the trade relations. These relations may be summed up by quoting an old Kyrgyz saying: “Friendship has nothing to do with bargaining”. But Akaev managed to cast doubt on the meaning of the age-old saying. A few years ago he initiated the signing of treaties of “eternal friendship” with Kyrgyzstan’s neighbors. But economically these treaties only worked in favor of the neighbors, as was the case with Uzbekistan. Clearly, Bakiev’s correct answer might inspire criticism of the president’s shortsighted initiative not only within parliament, but also in the independent media, which Akaev has had difficulty coping with recently, as attested to by the endless lawsuits brought by senior officials against independent journalists. Akaev is keen to close down the independent newspapers with the help of judges dependent on the presidential administration. The history of regimes of various types reveals one rule of thumb: Before a regime falls it resorts to the use of force against the opposition. Evidently, Akaev’s regime is no exception. The fuel crisis in the republic raises a legitimate question: Was it possible to avoid being dependent on Uzbekistan for gas? It certainly was. The following fact is evidence of this.

Because Bishkek and the northern regions of the republic had not been receiving natural gas from Uzbekistan since January 25, on February 20 the Bishkek mayor’s office took the only sensible decision: To replace gas cookers with electric ones in the capital from May 1 of this year. By late April a special program was drawn up to implement this. First high-rise blocks would be converted to electricity, then private buildings, and then hospitals, schools and cultural establishments. According to Vladimir Shchegolev, chief engineer with the Bishkek electricity company, at least one billion soms–over US$20 million–would be required to implement the program.

Why did the republic’s leaders not take this decision ten years ago, when market relations were first established with neighboring countries? Since then Kyrgyzstan has paid out around US$100 million to Uzbekistan in hard currency and in goods. Half of this amount would have been enough to convert the whole republic to electricity and eliminate its dependence on Uzbekistan for gas. This shortsighted economic policy can be explained by president Akaev’s lack of pragmatism. Capable only of abstract thought–as is characteristic of a theoretical scientist–Akaev has no experience of economic management. He himself unwittingly revealed his shortcomings in the title of a book he published last year: “Economics from the viewpoint of a physicist.” Everyone knows that physics has an extremely tenuous link with economics. The all-embracing problems of economics cannot be viewed from the perspective of an expert in a narrow branch of science-a truism that again is universally acknowledged. Thus Kyrgyzstan’s dependence on Uzbekistan for gas may be seen as a strategic mistake in economic policy that Akaev made as a result of his personal shortcomings.

FORMER COMMUNIST LEADER BECOMES A FREE MARKETEER

In contrast to Akaev, Turdakun Usubaliev–the man who ran the country for twenty-five years as first secretary of the communist party of Kyrgyzstan and who is now a member of the legislative assembly–recognized the importance of the republic’s water supplies long ago. A brief glance at water supply figures reveals the unexploited potential of the republic in a market economy.

The water supply in the Kyrgyz Republic is the highest among the countries of Central Asia. The average annual yield generated in the republic, based on average figures over several years, is 47.4 km3. There are 1,650 lakes in the republic containing over 1,560 km3 of water. Fresh water is provided by permanent glaciers with an area of 7,800 km2. These contain 650 km3 of water and mountain streams. They have a huge energy capacity of 180.5 billion kWh of electricity.

In 1997, Usubaliev cited these figures in drafting a resolution “On the interstate use by Uzbekistan, Kazakhstan and Tajikistan of the water resources of Kyrgyzstan.” This resolution was passed by parliament, and served as the basis of a draft bill Usubaliev placed before parliament “On the interstate use of the bodies of water, water supply and waterworks of the Kyrgyz Republic.” The draft bill noted that in a market economy Kyrgyzstan viewed its water resources as a commodity. Indeed, the country has every ground to make such an assertion. In January 1992 in Dublin, Ireland, the representatives of 100 countries and 80 international and nongovernmental organizations signed an agreement where one of the main declarations was that: “Water has an economic value wherever it is used and should be recognized as an economic commodity.”

There was no need to wait long for a reaction from Uzbekistan to the Kyrgyz parliament’s resolution and draft bill. For example, R. Giniyatullin, then head of the executive committee of the International Foundation to save the Aral Sea, declared that in the five years from 1992, Kyrgyzstan had dumped over 17 billion m3 of water onto Uzbek territory, tens of thousands of hectares of pasture were flooded, buildings, roads, communications and other objects were destroyed, and floods were created in the lower reaches of the rivers throughout this period. According to Giniyatullin, the total damage over the period amounted to around US$770 million.

In response, Mr. Usubaliev offered the following arguments: Compensation payments to Kyrgyzstan for maintaining and servicing its internationally significant waters (not including compensation for capital investment in construction) totaled just 2 percent of the annual economic benefit which the other countries derived from using Kyrgyzstan’s water supply and resources. It is estimated that the annual economic benefit amounts on average to $360 million in Uzbekistan, US$240 million in Kazakhstan and US$60 million in Tajikistan. In the 35 years that the Orto-Tokoi reservoir has been operational and the 22 years since the Kirov and Toktogul reservoirs were opened, Uzbekistan and Kazakhstan derived a net profit of US$7.6 billion. Meanwhile, during this period Kyrgyzstan spent around US$600 million on the maintenance and operation of its internationally significant waterworks. All of this suggests that the sides are politically irreconcilable.

Any problem has the potential to develop into a politically insoluble dilemma if its legal, economic and technical aspects are not addressed. The problem of the use of Central Asian water supplies is developing into just such a dilemma, because in the last five or six years neither the five republics concerned nor foreign specialists have offered any effective solutions.

Sadji is an independent journalist from Bishkek.