Announcement

Collapse
No announcement yet.

Eurasia Daily Monitor - 05/08/2006

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Eurasia Daily Monitor - 05/08/2006

    Eurasia Daily Monitor -- The Jamestown Foundation
    Monday, May 8, 2006 -- Volume 3, Issue 89

    IN THIS ISSUE:
    *Trans-Caspian gas pipeline project receives boost from Western
    officials
    *Cheney speech in Vilnius shocks Kremlin
    *Nazarbayev welcomes Cheney, Beijing reacts

    CHENEY VISIT SPOTLIGHTS KAZAKHSTAN'S PIVOTAL ROLE

    U.S. Vice President Richard Cheney's May 5-6 visit to Astana -- and an
    overlapping visit by European Union Energy Commissioner Andris Piebalgs
    there -- achieved a long-overdue rebalancing of Western policy
    priorities regarding Kazakhstan and, by implication, the region as a
    whole. At the joint news conference with Kazakh President Nursultan
    Nazarbayev, Cheney described Kazakhstan as a "key strategic partner of
    the United States" in terms of energy supply projects and anti-terrorism
    efforts.

    Cheney's visit increased the impetus toward the creation of a
    trans-Caspian oil transport system that would enable Kazakhstan to
    export its oil through the Baku-Tbilisi-Ceyhan pipeline. Discussions on
    that project had marked time for several years, largely because of
    Russia's monopolization of oil transit from Kazakhstan. U.S. Energy
    Secretary Samuel Bodman urged Nazarbayev in Astana in March to expedite
    the signing of the relevant agreements on the trans-Caspian project (see
    EDM, March 16). On the second day of Cheney's Astana visit, Kazakh Prime
    Minister Daniyal Akhmetov promptly announced in Baku that Kazakhstan is
    ready to sign those agreements next month.

    Moreover, Cheney's visit jump-started discussions over a trans-Caspian
    gas pipeline from Kazakhstan via Azerbaijan, Georgia, and Turkey to
    Europe. That pipeline would follow the Baku-Tbilisi-Erzurum (Turkey),
    where two options are available: either to Greece and Italy, or to
    Bulgaria, Romania, Hungary, and Austria. The Kazakh energy and mineral
    resources minister, Baktykozha Izmukhambetov, announced at the
    conclusion of Cheney's visit that Kazakhstan intends to request the
    European Commission (the EU's executive arm) to undertake a technical
    and feasibility study for the construction of a trans-Caspian gas
    pipeline. Kazakhstan will discuss joining the gas project to Erzurum at
    an expanded meeting with the participation of European customers. If,
    however, Astana insists on Iran's participation in that meeting, the
    project might bog down in political complications.

    Piebalgs also discussed the gas project on May 3-4 with Nazarbayev,
    conveying the interest of certain large European companies in gas
    supplies from Kazakhstan. The Baku-Tbilisi-Erzurum pipeline, with a
    projected capacity of up to 30 billion cubic meters, can combine gas
    volumes from Azerbaijan's Shah-Deniz offshore field (to which that
    pipeline is dedicated) with volumes from Kazakhstan. In addition,
    Piebalgs proposed that Kazakhstan speed up the signing of an agreement
    with the EU's Atomic Energy Community (Euratom) on deliveries of uranium
    from Kazakhstan.

    Any trans-Caspian project would, however, be commercially limited
    without inputs from Turkmenistan. Politically, moreover, Kazakhstan
    would be better placed to withstand Russia's opposition to the project,
    if the other eastern Caspian country participates as well. As the Hudson
    Institute's Zeyno Baran remarked on this occasion: If the United States
    continues to balk at dealing with leaders of energy-producing countries
    because of democracy concerns, then "Soon there won't be any more
    democracies in the region to participate with. You can say all you want
    about how we will not take part in these great games, but Russia and
    China are taking part in them, and the United States risks losing out"
    (Western news agencies cited by Moscow Times, May 5).

    On the anti-terrorism front, Cheney's visit highlighted Kazakhstan's
    contribution to American-led efforts in Afghanistan and Iraq. In the
    latter country, Kazakh military engineers and sappers form one of the
    exceedingly few units from predominantly Muslim countries (the other
    such contributing country is Azerbaijan). From October 2001 through
    April 2006, more that 3,000 flights of the United States and its NATO
    allies passed through Kazakhstan's air space on missions in Central Asia
    and Afghanistan, and 360 planes made emergency or refueling stops at two
    airfields made available by Kazakhstan for those purposes. In September
    this year, Kazakhstan will host the Steppe Eagle 2006 international
    military exercise with the participation of the United States, Britain,
    and Turkey under NATO's Partnership for Peace program.

    In Astana, Cheney stated that the United States favors a diplomatic
    solution to the Iran nuclear problem. He held up Kazakhstan as an
    outstanding example for Iran to follow in this regard: Following the
    Soviet Union's breakup, Kazakhstan renounced the inventory of nuclear
    weapons and infrastructure situated on its territory and fully
    cooperated with international organizations, Russia, and the United
    States in ridding the country of nuclear weapons components and
    materials.

    (Khabar news agency and Television, Interfax, May 5, 6)

    --Vladimir Socor



    AFTER VILNIUS, PUTIN HAS TO RECONSIDER HIS PROSPECTS

    U.S. Vice President Dick Cheney used his speech at last week's
    conference in Vilnius to address Russia in a blunt new tone. Prior to
    the conference, Russian President Vladimir Putin's advisers had assumed
    that the maximum extent of U.S. criticism had been set by the report,
    "Russia's Wrong Direction," presented by the Council on Foreign
    Relations (see EDM, March 13). Warning signals from experts and NGO
    activists who had gathered in Vilnius before the top-level conference
    were dismissed as "boring preaching from the EU" (Moskovskie novosti,
    May 5). But the broadside delivered by Cheney, regarded in the Kremlin
    as a no-nonsense political heavyweight, was compared to Churchill's
    landmark "iron curtain" speech 60 years earlier (Kommersant, Ezhednevny
    zhurnal, May 5).

    The cautious response from the Russian Foreign Ministry, which
    emphasized that the substance of relations had not changed, was
    obviously an attempt to downplay the effect, also by questioning the
    competence of VP's aides (Newsru.com, May 6). There was, however, a rush
    of defensive comments and rebuffs from outspoken Duma deputies and
    experts with ties to the presidential administration. Vyacheslav Nikonov
    and Andrei Kokoshin emphasized that Washington was irritated by Russia's
    growing power and decisiveness in asserting its "sovereignty," while
    Gleb Pavlovsky called Cheney's address a "considered nasty provocation"
    (Strana.ru, May 4, 5). Only Putin, however, can deliver the real answer,
    and he cannot postpone this answer any further than his annual address
    to parliament, scheduled for Wednesday, May 10 (Gazeta.ru, May 5).

    According to the carefully controlled leaks, Putin was not satisfied
    with the drafts presented to him in early April and so postponed the
    annual event in order to sharpen the focus of the speech, which
    essentially would be his last address before election season begins in
    2007 (Moskovskie novosti, April 21). Foreign policy was supposed to be
    one of the key topics, but now the "balance sheet" in this department
    has to be redrawn (Vedomosti, May 3). What had been an impressive record
    of achievements -- from strengthening the alliance with China to making
    a crucial difference in the Middle East -- has unexpectedly become
    recast as a series of opportunistic improvisations that has put Russia
    into a tight corner. The claim for restored "Great Power" status is
    undermined by the simple fact that Russia does not command due respect
    among its neighbors, and the expected triumph of the G-8 summit
    in St. Petersburg is seriously downgraded even if Cheney confirmed U.S.
    President George W. Bush's intention to take part.

    It has become impossible to deny that Moscow's carefully prepared agenda
    for the summit has been effectively cancelled and not only because Iran
    demands top priority or the issues in Russia's relations with Belarus,
    Georgia, and Ukraine are creeping in. The main problem is the topic of
    "energy security," which was supposed to be a trump card for Moscow but
    has become -- as Vilnius proved beyond doubt -- a highly contentious
    issue (Vedomosti, May 3; Kommersant, May 4). Putin's courtiers were
    absolutely certain that the stratospheric rise of oil prices
    automatically granted their boss a position of strength and still cannot
    comprehend the magnitude of their miscalculation. The plain fact of the
    energy "supply-demand" matrix is that Russia is far more dependent upon
    the export of its hydrocarbons to the European market than the West is
    dependent upon importing them from Russia. Despite all
    the talk about conquering the Asian markets and satisfying China's
    insatiable appetite, Moscow now and in the years to come is firmly
    plugged into European distribution networks -- and it desperately needs
    the income from delivering the contracted volumes of natural gas. What
    eliminates any possibility for building a position of strength is the
    lack of spare production capacity in oil and gas. Gazprom's "bad
    behavior" is on balance a far smaller mistake than its underinvestment
    in basic assets resulting in their degradation. In any emergency,
    perhaps a cold spell next winter, Russia cannot be a "swing producer" --
    and so, for all intents and purposes, is unable to provide any energy
    security.

    In mid-April, greeting German Chancellor Angela Merkel in Tomsk, Putin
    showed a slight disappointment in the EU's "unfriendly" attitude towards
    Gazprom, but now he has to stop nursing grudges and draw some serious
    conclusions. In his political plans, the G-8 summit has had a far
    greater significance than just diplomatic history and a prize photo
    opportunity. It should have sealed his fate as a statesman who
    impeccably performed a hard mission and could safely retire, remaining
    respected in the West, influential at home and decently rich as a member
    of a few corporate boards (Ezhednevny zhurnal, May 5). Now, however, the
    future looks far more troubled as the perfectly staged crowning moment
    transforms into a highly unpleasant rendezvous where seven Western
    counter-parts will enumerate their disappointment in his mismanagement
    of the energy sector and disapproval of his methods of
    leadership.

    The internal logic of the "vertical" system of power created by Putin
    rejects any transition of authority to a successor, however carefully
    chosen. It is far easier for him to "organize" a third presidential term
    than to implement an "exit strategy" that would forge a new compromise
    among the greedy elites and guarantee a safe retirement (Polit.ru, May
    3). Constitutional "technicalities" could be ironed out with massive
    public support and the key allies -- from China to Kazakhstan to Belarus
    -- would congratulate him with great relief. Western leaders would
    criticize, but they already do, so there is little to worry about.
    Cheney's stern warning that Russia is not "fated to become an enemy" in
    essence means that Putin's Russia has to be dismantled; it may be a
    choice too far for a lonely hostage of the Kremlin walls.

    --Pavel K. Baev



    CHENEY'S VISIT LEAVES ASTANA FACING NEW DILEMMA IN MULTI-VECTOR POLICY

    U.S. Vice President Dick Cheney praised Kazakhstan as "a good friend and
    important strategic partner," particularly in fighting international
    terrorism, as he wrapped up his two-day visit to Kazakhstan on May 6.
    The trip culminated with the signing of documents to amend the agreement
    to eliminate facilities for developing and testing weapons of mass
    destruction, cooperation in preventing the illegal movement of nuclear
    material, and a memorandum on mutual understanding on economic
    development.

    Although Cheney's visit was highlighted as a new phase in U.S.-Kazakh
    economic relations, and he pledged assistance to Kazakhstan in its
    endeavors to join the most economically competitive states of the world,
    the trip carried a strong political subtext. Fielding questions from
    journalists in Astana, Cheney essentially reiterated his statement, made
    earlier in Vilnius, that Russia is using its control over energy
    resources to exert pressure on the Baltic and Black Sea states. He said
    his views on that point coincided with those of other participants at
    the Vilnius summit. Kazakh President Nursultan Nazarbayev adopted
    Cheney's conciliatory tone and said that there was no confrontation
    between Russia and the United States. "Rather, it was a friendly
    exchange of opinions. We all should be accustomed to thinking that every
    independent state solves its problems and pursues a certain policy.
    We all should learn to respect this policy" (Kazakhstanskaya pravda, May
    6).

    Cheney's Vilnius speech also did not go unnoticed in China. Beijing
    media speculated, "Cheney's harsh criticism [of Russia] infected fresh
    tension that is likely to be still felt when Russian President Vladimir
    Putin hosts U.S. President George Bush at the summit of the G-8 club of
    rich nations in St. Petersburg in July." The official Chinese view is
    that Cheney's criticism was provoked by "Russia's new self-confidence"
    (China Daily, May 6).

    On the eve of Cheney's arrival in Astana, some analysts noted that the
    White House, no longer content with Kazakhstan's role as an important
    economic partner in Central Asia, was scheming to draw Astana into its
    geopolitical orbit. Kyrgyzstan's plans to revise the U.S. lease on the
    Manas air base and deteriorating relations with Uzbekistan make a
    long-term political alliance between Washington and Astana more
    realistic.

    Cheney's visit coincided with Kazakh Prime Minister Daniyal Akhmetov's
    trip to Baku, where he conducted talks with Azeri leader Ilham Aliyev
    and Iran's President Mahmoud Ahmadinejad. Akhmetov stressed Azerbaijan's
    need to ensure the security of the Caspian region and reaffirmed
    Kazakhstan's readiness to deliver oil to the Azeri Sangachal sea
    terminal to be sent onward to Europe, bypassing Russia. Experts believe
    Azeri oil and gas supplies alone are not enough to meet Europe's
    enormous demands for energy resources, and future deliveries from
    Kazakhstan through the Baku-Tbilisi-Ceyhan pipeline could make up the
    shortfall. But at the same time, analysts warn that Kazakhstan will have
    to stick to its multi-vector foreign policy and keep the right balance
    among China, the United States, Russia, and other players in the Caspian
    region (Delovaya nedelya, April 28).

    Like Aliyev, Nazarbayev is worried over the intensifying standoff
    between Teheran and Washington, which poses a direct threat to the
    Caspian region. Apparently, if Astana will not actively support the U.S.
    campaign against Tehran, the White House wants Kazakhstan to at least
    maintain a "friendly neutrality." Washington does not want Kazakhstan,
    which possesses one-fourth of the world's uranium reserves, to get too
    close to Iran. Talking to journalists, Cheney said the United States
    favors a diplomatic solution to the Iranian nuclear problem. He said
    Iran would be well advised to follow the example of Kazakhstan, which
    surrendered its nuclear arsenal in the early 1990s (Liter, May 6). He
    also lauded Kazakhstan for its peacekeeping efforts in Afghanistan and
    Iraq.

    Yet Astana expects much more than just praise and friendly words from
    Washington. American investment in the Kazakh economy has reached
    <html>.5 billion. Now Kazakhstan wants U.S. assistance for its nuclear
    energy program. Over the last two months the government has been
    actively discussing projects to construct nuclear power stations.

    Nazarbayev told journalists that his talks with Cheney were conducted in
    an open and trustful atmosphere. But Kazakhstan cannot easily discard
    Russian and Chinese interests in the Caspian region. Just before
    Cheney's visit Astana hosted the president of Russia's Lukoil company,
    Vagit Alekperov, who took part in the ceremony opening Lukoil's new
    branch office in Astana and announced plans to expand the company's
    activities in Kazakhstan's Khvalynskoye and Tsentralnoye oil fields
    (Kazakhstanskaya pravda, April 27).

    Even taking into account Russian and Chinese strategic priorities in
    Kazakhstan, Astana markets itself as Washington's most reliable partner
    in Central Asia. Thus, it is no wonder that the Bush administration
    toned down its criticism of political developments in Kazakhstan, mildly
    rebuking Astana for last year's presidential elections that were "not
    fully conforming to international norms." Cheney had only perfunctory
    talks with leaders of local political parties, conspicuously avoiding
    painful topics. He said Kazakhstan was on the right track with political
    reforms, but Astana still must prove that it deserves that assessment.


    --Marat Yermukanov


    The Eurasia Daily Monitor, a publication of the Jamestown Foundation, is
    edited by Ann E. Robertson. The opinions expressed in it are those of
    the individual authors and do not necessarily represent those of the
    Jamestown Foundation. If you have any questions regarding the content of
    EDM, or if you think that you have received this email in error, please
    respond to [email protected].

    Unauthorized reproduction or redistribution of EDM is strictly
    prohibited by law.



    The Jamestown Foundation
    4516 43rd Street, NW
    Washington, DC 20016
    202-483-8888 (phone)
    202-483-8337 (fax)
    http://www.jamestown.org



    Copyright (c) 1983-2005 The Jamestown Foundation.
Working...
X