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The borders of modern-day Central Asian states were drawn by Soviet policymakers under the direction of Josef Stalin in the 1920s and 1930s. Soviet officials sought to prevent each republic from becoming too independent or powerful within the region. As a result, today's Central Asian states depend highly on one another for key natural resources such as water and natural gas.
While Kazakhstan, Uzbekistan and Turkmenistan enjoy significant energy wealth, Kyrgyzstan and Tajikistan rely on imports for most of their oil and natural gas. Conversely, Kyrgyzstan and Tajikistan are located at the headwaters of two of the region's major rivers, giving them access to ample water resources as well as the ability to reduce water flows to Uzbekistan, Turkmenistan and Kazakhstan, which are situated downstream. The strong interdependencies among Central Asian states have contributed to a rise in tensions since the countries became independent in 1991. The population of Central Asia has nearly doubled since that time, further straining the supply of natural resources. As it did during the Soviet era, the Kremlin is now using the divisions among Central Asian states to prevent a single nation or group of states from dominating the others, something that could threaten Russia's position as the regional power.
Since mid-April, Kyrgyzstan and Uzbekistan have been embroiled in yet another dispute over natural gas supplies. Tensions between the two countries have also run high over Kyrgyzstan's plans for constructing new hydroelectric dams, which could periodically reduce water flows to Uzbekistan throughout the year. Russia is quietly using the two conflicts to enhance its own position while gaining leverage over Kyrgyzstan and Uzbekistan. At a time when Kyrgyzstan is hesitantly beginning to pursue Customs Union membership and Uzbekistan is in the midst of an internal power struggle over President Islam Karimov's succession plans, the Kremlin is trying to put Russia in a better position to shape the political evolutions of both countries.
Kyrgyzstan's Natural Gas Woes
Northern Kyrgyzstan, home to its capital, Bishkek, is connected to major natural gas pipelines linking the region to Uzbekistan and Kazakhstan. Southern Kyrgyzstan, including its cities Osh and Jalal-Abad, are connected to pipelines running east to west from Uzbekistan. But Kyrgyzstan does not have a pipeline connecting its north to its south, meaning that although northern Kyrgyzstan has been able to diversify its imports, southern Kyrgyzstan has remained highly dependent on natural gas flowing from Uzbekistan. On April 14, four days after Russian state energy company Gazprom officially took over Kyrgyz energy firm KyrgyzGaz, Uzbekistan cut off natural gas deliveries to Kyrgyzstan. The company argued that its contract needs to be renegotiated with Gazprom. As a result, southern Kyrgyzstan, including the city of Osh, has lost its access to natural gas supplies.
Russia is taking advantage of the situation by brokering a solution that enhances its leverage over Kyrgyzstan's leaders. As the new owner of KyrgyzGaz, Gazprom is responsible for negotiating with Uzbekistan. But so far it has not used its influence to compel Uzbekistan to resume natural gas supplies to Kyrgyzstan. The Kremlin means to keep Kyrgyz loyalty and eventually absorb it into its Customs Union. However, Kyrgyzstan's accession has stalled as the country's leaders ask Russia for more financial aid and exemptions from Customs Union rules. Moreover, Kyrgyz Deputy Prime Minister Taiyrbek Sarpashev said July 24 that the country may attain full membership only after several transitional phases, a process that could take five years, starting in 2015.
The natural gas shortage in southern Kyrgyzstan will only put more pressure on Bishkek throughout its accession talks, particularly as natural gas demand increases ahead of the cold winter months. In May, protesters blocked a highway in Osh. Small protests have taken place in Bishkek, and Stratfor sources say southerners are traveling north to protest. If shortages continue into the fall and winter, protests will likely become larger and more disruptive. In the past, mass protests have toppled Kyrgyz governments. To forestall such an outcome, the government will likely make more concessions to Russia in its Customs Union negotiations. And if Bishkek does in fact cater to Moscow's wishes, Russia will probably encourage Uzbekistan to start exporting natural gas to Kyrgyzstan again.
Kyrgyzstan's Electricity Ambitions
In addition to using its influence over natural gas flows, Russia is also trying to use the region's water issues to its advantage. For several decades, Kyrgyz leaders have pushed for the construction of large hydroelectric dam projects, which would enable Kyrgyzstan to become a major exporter of electricity, rather than a country suffering from chronic electricity shortages. The Kyrgyz government is currently working on a feasibility study for exporting electricity to China's Xinjiang province, and it also has aspirations for exporting electricity to Pakistan and Afghanistan.
There are currently at least five major proposed hydroelectric dam projects for the Naryn River. With a gross domestic product of just $7.2 billion, Kyrgyzstan cannot afford to construct the new hydroelectric plants without significant financial assistance from foreign investors. So far, Russia has been the only country to offer large-scale financial assistance and political support for the projects, meaning that they hinge completely on Moscow. As a result, progress has stalled as Russia has failed to deliver much of its pledged funding.
The largest of the projects is the 1,900-megawatt Kambarata-1 hydroelectric dam project, but it has remained in the planning stage since the Soviet era. A feasibility study conducted by Canadian firm SNC-Lavalin International Inc. found that the estimated cost of the project is $3 billion, a sum Kyrgyzstan cannot afford on its own. Though Moscow pledged $2 billion for the project in 2009 and came to an official agreement regarding the dam during Russian President Vladimir Putin's visit to Kyrgyzstan in 2012, major funding from Russia has yet to materialize. Moreover, once the dam is constructed, Kyrgyzstan will likely need Russian financial and technical support for the dam's maintenance. Another project, the 350-megawatt Kambarata-2, has seen limited progress. It opened its first section in 2010 with the help of a small Russian loan and currently generates 50 to 70 megawatts per hour.
Russia says it will continue to commit money to the Kyrgyz projects. But it has deliberately neglected to honor those commitments because the outstanding water issues give Moscow power over Kyrgyzstan and Uzbekistan, so long as they remain unresolved.
Leverage Over Uzbekistan
Just as the Kremlin wants to pressure Kyrgyzstan to join the Customs Union, it also wants to gain leverage in Uzbekistan. Unlike Kyrgyzstan, Uzbekistan is the most independent country in Central Asia; it seeks to become a leader in the region after leaving Russia's sphere of influence. In 2012, Uzbekistan suspended its membership in the Russia-led Collective Security Treaty Organization, demonstrating Uzbekistan's willingness to chart its own course away from Russia-sponsored regional integration projects. Therefore, the Kremlin has prioritized establishing the kind of influence in Uzbekistan that it has in other post-Soviet states
To that end, supporting Kyrgyzstan's hydroelectric projects benefits Russia. Agriculture makes up about 28 percent of the Uzbek economy. Cotton exports remain vital, accounting for roughly 17 percent of export revenue. If Kyrgyzstan completes work on its large hydroelectric projects, its reservoirs will need to be filled completely in order to feed the dams. The timeline for completing this process, which could range from months to years, will determine the impact on the downstream countries. Once the reservoirs are filled, Kyrgyzstan will also be able to have some control over the flow of the river, allowing more water through when more electricity is needed and less when the demand is lower.
However, Kyrgyzstan's decisions regarding water levels may not necessarily line up with agricultural demands in downstream countries such as Uzbekistan. The construction of the projects would therefore give Kyrgyzstan significant leverage over Uzbekistan; Kyrgyz officials would have the power to reduce water flows at will.
Unsurprisingly, Uzbekistan strongly opposes Kyrgyzstan's hydroelectric projects. Russia's repeated public commitment to help Kyrgyzstan finance the construction of new hydroelectric plants thus gives the Kremlin additional influence and leverage in Bishkek and Tashkent. For Kyrgyzstan, Russia's pledge to finance large-scale hydroelectric plants offers hope for solving the country's electricity problems. It also offers hope for helping the country harness its only abundant natural resource -- water -- to become a profitable electricity exporter. For Uzbekistan, Russia's promises to fund or withhold funding from Kyrgyz projects are a reminder that Russia has can still undermine country's water security significantly.
Kyrgyzstan has long been a largely pro-Russia state. While the country's leaders have decided to apply for Customs Union membership, social tensions and the unpopularity of some Customs Union regulations are presenting a challenge for the Kyrgyz government. Uzbekistan, on the other hand, has been one of the more independent-minded post-Soviet states. Nevertheless, the Kremlin may see the country's ongoing power struggle as an opportunity for gaining future influence. Russia will continue using those tensions so long as it benefits it to do so.
Courtesy : Stratfor (www.stratfor.com)