‘multi-vector diplomacy’, pipelines and cash

‘multi-vector diplomacy’, pipelines and cash

http://www.the-diplomat.com/001f1281_r.aspx?artid=388

After taking a backseat to the United States and Russia in Central Asia since the collapse of the Soviet Union, China is finally making its mark in the region, says Joshua Kucera. But while the three powers vie for influence, it could be the ‘stans’ that are playing the wiliest game of all.

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When the leaders of Kazakhstan, Uzbekistan, Turkmenistan and China gathered in the desert of eastern Turkmenistan in December to inaugurate a new 1,800-kilometre natural gas pipeline running from Central Asia to China, it marked China's dramatic entrance into a battle previously dominated by Russia and the West over access to the region's natural resources. It also was a measure of Beijing's increasingly confident foreign policy, and its growing ties to--and interest in--its neighbours of the former Soviet Union.

‘This project has not only commercial or economic value. It is also political,’ Turkmenistan's president, Kurbanguly Berdymukhamedov, said at the time. ‘China, through its wise and farsighted policy, has become one of the key guarantors of global security.’

Since the collapse of the Soviet Union, when the five ‘stans’ of Central Asia became independent countries, China has for the most part taken a back seat to the United States and Russia in this strategic region. In the 1990s, the United States began trying to gain influence largely to secure access for US companies to the oil and gas reserves that were just starting to be discovered, while also, through various democratization and human rights efforts, trying to get the authoritarian governments to liberalize their political systems. After the attacks of September 11, 2001, the US focus turned to military cooperation as it set up air bases in Uzbekistan and Kyrgyzstan. The region was a useful gateway into Afghanistan (which borders Turkmenistan, Uzbekistan and Tajikistan) and was also thought to be susceptible to the same sort of radical Islamism that vexed Afghanistan.

Russia has viewed all of this as an unwelcome intrusion into its backyard, and a threat to its own interests. The Soviet-era oil and gas infrastructure oriented all the export routes for Central Asia's petroleum resources through Russia, from which Russian state-owned companies profit handsomely. US democracy promotion campaigns look, from Moscow's vantage point, to be stalking horses for the sort of anti-Russian ‘colour revolutions’ that took place in Georgia and Ukraine. And US military bases in Central Asia compromise Russia's strategic depth in the region--Russia has its own large military base in Tajikistan and smaller facilities in Kyrgyzstan.

China, meanwhile, has carried out relatively quiet diplomacy in Central Asia, focused on narrow issues like delineating borders between it and the newly independent states, and in gaining cooperation on shutting down networks of dissident Uyghurs, a Turkic people closely related to Central Asians who were using the ‘stans’ as rear bases for anti-Beijing activities.

For most of the past 20 years, China's presence in Central Asia was innocuous enough to allow both the United States and Russia to believe that it benefited them. In US eyes, the primary goal was to loosen the grip that Russia had on these territories for centuries, and China would help in this. In addition, especially after September 11, the US welcomed China's cooperation in fighting terrorism in Central Asia.

Russia, too, cooperated with China in Central Asia, especially in trying to thwart a US military presence there, in both of their backyards. They formed the Shanghai Cooperation Organization, a regional security group originally billed as a ‘NATO of the East’ and including all of the ‘stans’ except Turkmenistan, which in 2005 called for the United States to leave its military bases in Central Asia.

And it worked: Shortly afterwards, the government of Uzbekistan forced the US to leave its base there; now it only has a base in Kyrgyzstan. (However, differences eventually emerged between Russia and China as to how the SCO should be oriented: while Russia wanted a more military-oriented alliance--the group still holds regular joint military exercises, though they've grown smaller in recent years--China was more interested in making it a tool for economic integration.)

But the opening of the Turkmenistan-China pipeline has changed the game, and has established China as a true player in the region, to the likely detriment of both Russian and US energy interests.

The focus of US energy policy in the region is getting natural gas to Europe from the Caspian Sea region without going through Russia. While the United States wouldn't get any of the Caspian gas itself, its aim is to break the monopoly that Russia has over the natural gas market in many European countries, especially former Warsaw Pact countries like Bulgaria and Romania that are most vulnerable to Russian pressure and also some of the most loyal US allies in Europe. The danger of that monopoly has been illustrated over several recent winters when Russia cut off gas supplies to Europe--ostensibly over pricing disputes, but targeting political nemeses like Ukraine.

To that end, a US-backed pipeline transporting gas from Baku, on the Caspian Sea coast, to eastern Turkey, went online in 2006. And the United States is now attempting to put its weight behind another pipeline project, either the Nabucco pipeline (which would take gas from Turkey to Austria) or the so-called Interconnector Turkey-Greece-Italy.

But no one will build such a pipeline, no matter how strong the political support from Washington, if it won't make money. And the question about these pipelines is, where would the gas come from? Azerbaijan has pledged some gas from the Caspian Sea, but the amount it could provide would not be enough to make the pipeline worth building. Iran--which has the second-largest gas reserves on Earth--has offered to take part. Turkey supports that, but it is of course not palatable to the Americans. Iraq is a possibility, but by far the most tempting options are from Central Asia: Kazakhstan and, especially, Turkmenistan.

Turkmenistan's known gas reserves are in the top five in the world, with the possibility of even greater discoveries to come. But no one is sure if it has enough gas to supply both China and the West, not to mention Russia (where Turkmenistan exported 70 percent of its gas until the Chinese pipeline started up) and Iran (with whom it also inaugurated a pipeline in December).

The Chinese pipeline could hurt Russia's monopoly position in Europe if it siphons off so much gas that Russia doesn't have enough to supply its European customers. But it could also thwart US plans. Turkmenistan's government says that it will have enough gas to ship some across the Caspian to Europe, in addition to supplying Russia, China and Iran, with whom it also inaugurated a new pipeline project in December. But it’s not yet clear if that’s true. And US officials have publicly acknowledged that China has made their bargaining position weaker: ‘It’s hard for us to compete with China in some of these countries, particularly countries that are a little more insular,’ said Richard Morningstar, the Obama administration's Eurasian energy envoy, at a congressional hearing last year. ‘It’s easy for Turkmenistan to make a deal with China, when China can come in and say, “Hey, we’re going to write a check for X amount of money, and we’re going to build a pipeline, and furthermore we’re going to lend you money so that you can explore, and we will be paid back in gas that you, ultimately, deliver to us.” You know, that's not a hard deal to accept. And we can’t compete in that way.’

Meanwhile, the US is correspondingly scaling back its energy ambitions in Central Asia, perhaps a tacit admission that they’re not likely to be achieved. In a January speech, Morningstar showcased a new Caspian energy strategy that was remarkable for its modesty. Morningstar said the United States would not necessarily object if Europeans chose not to build Nabucco and instead built one of the alternative pipelines that Russia backs. And he said Russia would even be welcome to participate in Nabucco if it wanted.

Thus far, China's economic gains in the region have not been matched by political influence. And Central Asian publics are much warier of China than they are of the United States or Russia: When Kazakhstan in December mooted the idea of leasing some of its farmland to China, rare public protests erupted.

So, in all this geopolitical back-and-forth, who is ‘winning’ in Central Asia? It's a common trope among armchair geopoliticians that the competition between the United States and Russia in Central Asia is a new ‘Great Game,’ referring to the spy-vs-spy intrigue between Britain and Russia in the 19th century, when each country manipulated the weak kingdoms and city-states of Central Asia as pawns against their rivals.

But these days, the Central Asian states are as likely to be using the big powers as pawns. For example, in 2008, while the Turkmenistan-China pipeline was under construction, Kazakhstan, Uzbekistan and Turkmenistan announced that they would dramatically raise the prices they charged to Russia for their natural gas. Says Central Asia analyst Martha Brill Olcott: ‘The increased bargaining power of the Central Asian states owes more to the entry of China into the market than to the opening of [the U.S.-backed pipelines going west].’

Kazakhstan's government even has a name for this tactic: ‘multi-vector diplomacy.’ Its government has dealt skilfully with oil companies, governments and militaries from Russia, China and the West to maximize its leverage and build the country into the success story of Central Asia. And its resource-rich neighbours, particularly Turkmenistan, are learning that lesson.

‘With an increasingly sophisticated understanding of the “game,” Central Asian governments have been able to bid up the price they are paid for their resources by playing one superpower off another,’ says Scott Radnitz, a Central Asia scholar at the University of Washington. ‘As Central Asian energy exporters increasingly diversify their export markets, the leverage anyone has over them will decrease.’

In the end, the ‘winner’ of all this 21st century intrigue might not be Russia or the US or even China, but the Central Asian countries themselves.