Borders Hardening throughout Central Asia in Anticipation of NATO Pullout

Kyrgyzstan’s Border Guards Service announced on May 9 that the United States will finance the construction of six facilities in Kyrgyzstan for use by Kyrgyz security forces. They will include a barracks, a command center for the Border Guards’ southern services and new checkpoints. The US Embassy confirmed the plans to build the facilities through CENTCOM, though no specifics were provided (paruskg.info, May 11).

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Kyrgyz-Russian Relations Salvaged, as Gazprom Weighs Another Buyout

Kyrgyzstan President Almazbek Atambaev, in an interview with the Russian daily Kommersant on April 10, said that while some may want to drive a wedge between Russia and Kyrgyzstan, “this will be hard to do.” Considering Atambayev’s streak of bewildering statements on Russia, and Kyrgyzstan’s policy over the last month, fallout appears to be becoming a permanent possibility.

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Nazarbayev Drifts from ‘Multi-Vector’ Foreign Policy

In an interview with Russian state television, Kazakhstan President Nursultan Nazarbayev chided the West for trying to influence other countries through mass and new media, echoing positions long held by the Kremlin. The aging Kazakh leader appeared reasonably healthy and articulate on the issues. But his comments may challenge his long-held multi-vector foreign policy, which sought to advance Kazakhstan’s national interests by balancing those of the West, Russia, and China. With Afghanistan’s future in doubt and domestic stability becoming a question for the first time, Nazarbayev is more openly tying Kazakhstan’s future to Russia.

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US Secretary of Defense Seeks to Shore Up Manas Air Base

Secretary Panetta visited Kyrgyzstan on March 13 to solidify that Bishkek honors its commitment to the agreement to host the U.S. military’s Transit Center at Manas International Airport outside Bishkek. The agreement lasts through mid-2014, though U.S. forces will need the base at least through the end of that year. Previous negotiations have been volatile, though each has ended in the U.S. paying a significantly higher price in exchange for business continuing as usual. Yet, given Moscow’s interest in avoiding a haphazard U.S. evacuation of Afghanistan, there is reason to believe that agreements over the Manas base will be extended as long as needed.

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Azerbaijan Planning Oil Refinery in Kyrgyzstan

Azerbaijan’s state oil company, SOCAR, is negotiating with authorities in Kyrgyzstan to set up a refinery in the country. While the project may help the Kyrgyz economy, it remains unclear whether it will help wean Bishkek off Russian energy supplies or force Kyrgyzstan simply to swap its dependence on Russian refined fuel for a dependence on Russian crude oil.

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China-Kyrgyzstan-Uzbekistan Railway Brings Political Risks

The below article originally appeared in the March 7, 2012 edition of the Central Asia and Caucasus Analyst, a bi-weekly publication of the Central Asia-Caucasus Institute and the Silk Road Studies Program Joint Center.

The signature infrastructure project of Kyrgyzstan’s new leadership is a 268 kilometer railroad line that would link China with Kyrgyzstan’s southern provinces and Uzbekistan. President Atambayev insists that Kyrgyzstan would profit greatly from inter-regional transit trade if the US$ 2 billion-plus line were built. Restrictions on Kyrgyzstan’s once lucrative practice of re-exporting Chinese goods to Russia and Kazakhstan have been increasingly curtailed by new Customs Union rules, leaving Bishkek searching for new sources of national income and employment. While the railroad would lower the costs for traders, its price tag in both monetary and political terms will not be insignificant.

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Moscow Offers Customs Union-Lite to Bishkek

On the southern bank of a tiny river lined with concertina wire, half a dozen empty freight trucks are idling, waiting to enter Kazakhstan. Ken-Bulun may look like a minor border crossing between Kazakhstan and Kyrgyzstan, but it is a doorway to a market of almost 165 million people – the new Moscow-led Customs Union of Russia, Belarus and Kazakhstan. And the truckers are growing impatient.

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Interview for Deutsche Welle Documentary

An excerpt from an interview I gave back in 2010 to a DW documentarian on regional trade in Central Asia. It was taken at Dordoi Bazzar outside Bishkek, Kyrgyzstan. He liked the background chaos, as is supposedly adds authenticity.

The first response is to a question regarding whether Russia can lead a Customs Union within the WTO (it can), and whether Kyrgyzstan could join that Customs Union without violating WTO rules (without changes to the CU’s tariffs, it can not).

The second response is to a question on the effect of the Customs Union on trade between China and the EU. There should be little, since most of China’s trade with the EU travels by sea. Some expediters, such as DB Schenker, have been trying to establish a road/rail logistics corridor that would be competitive with sea routes for some products. It is possible that new CU bureaucracy or transit trade regulations could curb any headway the private sector can make in this area.

Russia and its leadership have long relied on customs duties as a major indirect revenue stream, and the CU is a natural extension of that regime.

Putin Assures Central Asia they Want His Customs Union

The question of whether Russia will try to draw more of Central Asia into the recently christened Customs Union of Russia, Kazakhstan and Belarus (CU) was put to rest on May 21. At a meeting of the heads of the Eurasian Economic Community (EurAsEC) member states, Russian Prime Minister Vladimir Putin made clear his intentions to expand the CU further south:

As far as I know, there is not a single member of EurAsEC which would not like to join the work of the Customs Union. We will work with you in this direction.

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