Interview for RFE/RL on Internet in Turkmenistan

One of the rare American-born folks I’ve met who actually speaks Turkmen (they are nearly all Peace Corps volunteers) recognized my name from reading an interview I gave to Radio Free Europe / Radio Liberty on the state of the Internet in Turkmenistan. He said he had read it recently, though it was from 2011.

I didn’t even remember the conversation, to be honest. But, sure enough, there it is on the site. I am pleased to report that I was able to get a visa to visit my favorite -stan even in spite of this article.

I there is something interesting in there.

Thoughts on Turkmenistan’s Privatization

Like all the other dozen folks who follow Turkmenistan, I’ve noticed the recent press on its supposed privatization plans. Berdymukhammedov announced that some unspecified state-run companies in the construction, transport, and communications industries would be sold off starting this year.

The big news in the international press was that the government would not sell its most valuable oil and gas assets. This, of course, should come as no news to anyone who follows Turkmenistan.

Still, that Turkmenistan would do anything approaching market reforms may come as a surprise. 

First reaction would be to believe only what we see. Will international companies be involved? Whether they are or not would have importance. 

More importantly, what companies are we talking about? If we are discussing Turkmen Airlines, Railways, the state mobile phone network Altyn Asyr, and the regional state construction companies, we would be talking about central pieces of the command economy. Airways and Railways are notorious money holes, through which millions in state expenditures are passed. Altyn Asyr is one of two national mobile providers, and while dysfunctional, it has significant revenues.

The contracts that are executed by the state construction firms are worth millions. While the most lucrative contracts are executed by Turkish, Chinese, Russian, and French firms, local companies (each close to GMB), have started implementing bigger deals. Local interests connected to GBM may be pressing for control of these assets.

The most obvious candidates for privatization would be the garment factories, particularly those already under Turkish management. For some reason, they don’t seem to be on the list.

If these aren’t the assets that are going to be put to market, then they probably are not worth much.

Iran’s Turn on Turkmenistan’s Gas Dispute Carousel

Iranian Oil Minister Rostam Qasemi announced November 14 that Turkmenistan had halted gas exports to its southern neighbor over a price dispute. Shortly thereafter, a Turkmen official told Reuters there is no price dispute, but that pipeline repairs are to blame for the gas cut.
For now, the gas is back on, Reuters reports, citing a Turkmen official who said Iran requested repairs to the pipeline. But the episode – complete with contradicting reports from the two sides – looked familiar, and suggested a few possible scenarios.

Iran-China Railroad – Tajikistan’s Latest Mega-Distraction?

With work essentially stopped at Rahmon’s marquee ‘project of the century’, including thousands of layoffs of construction workers who might be wishing they had gone to Russia this summer, time has arrived for Tajikistan to come up with a replacement nation-saving mega project. Perhaps this is why we are again hearing talk of a plan to build a railroad linking the country with China and Iran.

The line would run from Iran’s existing spur to Herat to southern Tajikistan, assumedly near the US-funded bridge at Nizhny Pyanzh, then proceed to Yavan, through the Rasht Valley to Kyrgyzstan’s Alai Valley, cross the Irkeshtam Pass and descend to Kashgar, in southwestern Chinese Xingjiang.

The project has been kicking around for years, though somehow has never gotten off the ground. Perhaps that somehow was the likely multi-billion dollar tab that no one is committed to picking up. Or the technical complications of building the line at high altitudes and through narrow river valleys. Or the fact that China, Iran, and the Central Asian republics all use different rail gauges. Or that existing lines already link Iran and Central Asia. And that Afghanistan is a war zone. And occasionally, so is the Rasht Valley.

All that aside, Iran and Tajikistan have started talking up the project again of late. Kyrgyz officials expressed no interest in the project as recently as June, and rightly so, it would only pass through a remote and sparsely populated valley. Then this month, Iran’s ambassador in Bishkek recently announced that Iran would pay for the stretch through Kyrgyzstan, which was swayed by the no-risk proposition. While any charity is generous, this stretch is short and almost entirely flat. The Tajik line would also not connect to Kyrgyzstan’s own nation-saving mega project, a rail line that would connect China and Uzbekistan across the Torugart Pass, north of Irkeshtam across an impenetrable range.

Kyrgyzstan has bandied that rail project around since at least the mid-90s, though Atambayev and Babanov have all but staked the country’s economic future on the idea. The two repeatedly insisted after repeated results-free trips to Beijing that ‘every issue related to the project is solved, except financing’. When talking about two threads of iron to cost Kyrgyzstan about 40% of a year’s GDP, financing is really the issue, is it not? Thus, Kyrgyzstan is left with two bad options: rails for minerals, or rails for tolls. Either Chinese enterprises would get privileged access to mineral concessions, or would be permitted to run the railroad to recoup the costs. Both options bring serious political risks for Bishkek, as I have argued in the past.

Tajikistan would have to offer China a similar deal. Like when Dushanbe unceremoniously gave away 1,100 sq km of mountainous territory to China in 2011, or when leases agricultural land to Chinese farming enterprises, Dushanbe will have to test its people’s patience yet again. Iran may be willing to pay for Kyrgyzstan to play nice, but the initial ascent from China and the descent through the Rasht Valley will be by far the most costly aspects of the project. Iranian media already acknowledges this, and provides some decidedly low-ball figures. The Rogun stoppage shows just how far Tajikistan can go with this projects without massive foreign backing, which is, not far. Heavily-sanctioned Iran can’t possibly have the cash lying around for a huge up-front outlay.

Even if China could be enticed to cover the cost, the whole plan would run up against the US policy of ‘No Silk Roads Lead to Persia’. Despite the possibility that this particular railroad might be more valuable to Afghanistan than alternatives options to expand Uzbek or Turkmen spurs into Afghan territory, it seems quite likely that the US will veto any progress while US troops are on the ground. And after they are gone, will the investment be protected?

Iran is supposedly still in the feasibility study phase – a process that in this part of the world means “study just how great an idea this is”. Rail investment best addresses the need to move heavy, often low-value-added goods, in large bulk, and without a tight time schedule. Marble in Balkh? Oil in Faryab? Afghanistan’s now-legendary Angyak copper deposit would be far removed from the line. Realistic studies of the rail lines viability would have to measure the actual probability of success of such nascent ventures. They would also have to measure them against the next-best alternative, not against the status quo. In this case, Iran and China have an existing rail link through Turkmenistan, Uzbekistan, and Kazakhstan. Cutting across Afghanistan and Tajikistan would save some time. But containerized trucks can already do the same thing, and without the need to switch wheels three times. Without greatly increased demand for freight services between the countries involved, such a rail line may not make economic sense. But as Rogun shows, nation-saving mega projects are bigger than economics. They’re about national mobilization, national pride, and, perhaps, national distraction.

This post was originally published by Registan, with full maps and links.

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).

Continue reading Borders Hardening throughout Central Asia in Anticipation of NATO Pullout

Geographic Engineering Par for the Central Asian Course

Tajikistan has joined the list of Central Asian countries rumored to be planning to relocate its capital.

The construction of a new international airport in tiny Dangara, 100 kilometers southeast of Dushanbe, has invited speculation that President Emomali Rakhmon plans to relocate the seat of government there, RFE/RL reports.

Continue reading Geographic Engineering Par for the Central Asian Course