Geopolitical Competition in the Central Asia, the Dynamics of Relations with Azerbaijan

GEOPOLITICAL COMPETITION IN THE

Azad Garibov & Rovshan Ibrahimov

Baku-2013

THE DYNAMICS OF RELATIONS WITH AZERBAIJAN

CENTRAL ASIA

SAM Comments Volume IX, August 2013

CENTER FOR STRATEGIC STUDIES

GEOPOLITICAL COMPETITION IN THE CENTRAL ASIA

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About the authors and institution_________________________________________05

List of maps and graphs ____________________________________________________06

Introduction ________________________________________________________________07

Emergence of the Central Asia as a single region after the collapse of the Soviet Union ____________________________10

Russia and the Central Asia: Do all Central Asian roads still lead to Moscow? _________________________12

Russian levers of influence in the Central AsiaStrengthening multilateralism as Russia’s new means for the long term influence in the regionConclusion

China and the Central Asia: A new game changer or an inevitable dominant? ________________________19

1990s and the beginning of 2000s: Domination of security concernsGrowing demand for energy and natural resources as a new driver of Chinese policy in the Central AsiaChinese credits as a new and important lever of influence of Beijing in the regionAttempts for soft power influence and “cautious expansion” approach to the regionConclusion

The U.S. and the Central Asia: how far is the U.S. from the Central Asian region ________________________26

The U.S. strategy in the Central Asia before and after the 9/11 attacks Approaching withdrawal from Afghanistan and reactivation of U.S.-Central Asia relationsThe U.S. interests in the Central Asia after 2014Conclusion

The roles of other regional actors in the Central Asian power game: Turkey, Iran and India ________________________________________________________32

CONTENTS

SAM COMMENTSTHE DYNAMICS OF RELATIONS WITH AZERBAIJAN

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Turkey and Central Asia: From romantic Turkish unity policy to realist economic and political partnership_______________32

Three periods of Turkey’s relations with the Central Asian republicsCurrents relations: Economic interests and rise of Turkey’s role as an economic partnerNew institutions for more effective multilateral cooperation Conclusion

Iran and the Central Asia: A contentious partner for the region ________39Soviet collapse: Opportunities and challenges for Iran in the Central AsiaIslamic identity of Mullah Regime and its impact on Tehran’s Central Asia policiesVarying level of development of relations with regional countriesCurrent strategic interests of Iran in the region: Regionalism, economic engagement and infrastructure developmentChallenges for developing relations with the Central Asian countriesConclusion

India and the Central Asia: Time for a more comprehensive strategy _________________________________46

India’s growing strategic interests in the Central AsiaConnect Central Asia policyTransportation infrastructure: A much needed component Conclusion

Azerbaijan’s relations with the Central Asian countries: Trade, energy, investment and transportation ___________________________53

Trade between Azerbaijan and the Central Asian statesExport of the Central Asian hydro-carbon resources through Azerbaijan’s pipeline systemsAzerbaijan’s plans for investment in oil ifrastructure and refineries in the Central AsiaEstablishment of the South Caucasus-Central Asia transit corridor

Conclusions and Recommendations ______________________________________71

Bibliography ________________________________________________________________76

CONTENTS


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About the Authors and Institution

About Center for Strategic Studies (SAM)

The Center for Strategic Studies (www.sam.az) is Azerbaijan’s first government-funded, non-profit and academically independent think tank, known as SAM (Strateji Araşdırmalar Mərkəzi in Azerbaijani). The mission of SAM is to promote collaborative research and enhance the strategic debate as well as providing decision-makers with high-quality analysis and innovative proposals for action.Through publications, brainstorming meetings, conferences and policy recommendati-ons, SAM conducts rigorous research guided by a forward-looking policy orientation, thus brin-ging new perspectives to academic research in international level. SAM was ranked 124th in the top 150 global think tanks according to 2012 Global Go To Think Tanks Rankings and associated trends report by Pennsylvania University.

Azad Garibov

Azad Garibov is a research fellow in the Foreign Policy Analysis Department of the Center for Strategic Studies under the President of the Republic of Azerbai-jan (SAM) as well as assistant professor in the Department of Political Science and International Relations of Khazar University where he teaches courses on EU Law and EU in Global Politics. He received BA International Relations de-gree from Baku State University and did MSc degree in International Politics at the University of Glasgow (UK). Azad Garibov is also a frequent contributor to the various online and published newspapers and journals, including the Jour-nal of Turkish Weekly. His areas of inters include politics and security issues in central Asia, trans-Eurasian transport as well as Caspian affairs.

Rovshan Ibrahimov

Dr. Rovshan Ibrahimov is the head of Foreign Policy Analysis Department at Center for Strategic Studies under the President of the Republic of Azerbaijan (SAM), since 2011, and the Founder and Associate Professor of International Relations Department at Qafqaz University, since 2003. Dr. Ibrahimov has been working at Qafqaz University since 1999 where he served as Director of the Center for Energy Studies, Head of International Relations and Regional Studies Departments, and Vice-Rector on External Affairs. He was a Visiting Research Fellow at George Mason University (US) and University of Oxford (UK) and Visiting Lecturer at the University of Wroclaw (Poland), University of Siegen (Germany) and Suleyman Demirel University (Kazakhstan). He re-ceived BA, MA, and PhD in Political Sciences at Ankara University (Turkey). He also was editor at USAK Energy Review, International Strategic Research Organization’s publication (2007-2009).His areas of expertise include energy politics and security, Azerbaijan’s foreign policy, and politics of South Cauca-sus. Dr. Ibrahimov is the author of and contributor to a number of edited books and author of more than 100 professional articles and commentaries.

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LIST OF MAPS AND GRAPHS

Maps:

Map 1: Political map of the Central AsiaMap 2: Russian and American military installations in KyrgyzstanMap 3: Central Asia-China oil and gas pipelinesMap 4: Major U.S. logistics routes to AfghanistanMap 5: Proposed route for TAPI pipelineMap 6: Baku-Tbilisi-Ceyhan pipelineMap 7: Planned Southern Gas Corridor through AzerbaijanMap 8 and 9: Europe-Asia ocean route and Trans-Siberian railwayMap 10: TRACECA member countries and their major West-East trans-portation routesMap 11: Baku-Tbilisi-Kars railwayMap 12: Alyat sea port and logistics centerMap 13: Main East-West land transit corridorsMap 14: Viking railway

Graphs:

Main indicators of Azerbaijan’s trade with the Central Asian countries in 2012Azerbaijan’s trade relations with the Central Asian countries in 2012 Azerbaijan’s trade with the Central Asian countries for the last three years


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The Central Asian region emerged after the collapse of the Soviet Union and is formed of five independent states: Kazakhstan, Uzbekistan, Turk-menistan, Kyrgyzstan and Tajikistan. Origins of these states also date back to the USSR, when in 1920s and 1930s they were established as separate Soviet republics and their borders were drawn by Soviet Commissars of Nationalities according to the ethnic lines. In general, the countries of the region have a common history and culture, which contributes to the perception of a Central Asia as a single region. However, with regard to the political and economic processes, kinship among these five countries is at quite a low level to call the area as a full-fledged region.

After the independence, all these countries faced serious political and economic challenges. It was necessary to create a functioning state, which is capable to ensure their livelihoods. Despite the similarity of problems, each state sought solutions in different ways to their problems and they have shown different development outcomes. The most devel-oped state of the region is Kazakhstan, it managed to take advantage of natural resources to improve economic situation. Along with Kazakhstan, in Turkmenistan, and to a lesser extend in Uzbekistan hydrocarbons con-tributed to the certain achievements in development of national econo-mies. Kyrgyzstan and Tajikistan, which lacks any sizeable hydro carbons resources, are the least developed countries of the region.

Introduction


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Despite the fact that since independence it has passed more than 20 years the countries of the region have been unable to establish any significant regional alliances. In general, all attempts to start the integration pro-cesses faced setbacks and ended in failures. Any form of associations in-volving all regional states has been possible only with the participation of third actors – bigger external neighbors. For instance, Russia and China have played a catalytic role in bringing those together to the Shanghai Organization, which was established with the aim to ensure the security and stability in the region.

Russia and China are the major players in the region, both of which have wide-ranging interests and enjoy significant levers of influence in the re-gion. Both countries have their own interests in the Central Asia and hold positions in proportion to their importance. For Russia, this region plays a role of the buffer zone which protects it from the vulnerable Afghani-stan and the possible impact of religious extremism. In addition, Russia is interested in controlling the flow of energy resources from the region to make sure they run through its territory. In doing so, it aims to receive both political and economic dividends. Also, China is interested in ensur-ing the stability of the north western regions from the impact of national-ism in the Central Asia which can potentially trigger separatist sentiments among Uygur population of Chinese Xinjiang province. In addition, in China the Central Asian region is viewed as a source of raw materials and energy resources that developing Chinese economy is in need of, as well as a market for the Chinese industry products. However, the significance of the region is not only restricted to the interests of these two countries.

The United States also show interest towards the Central Asia, which for sure disturbs Russia and China. The United States have their own geopo-litical interests in the region related primarily to the current military op-eration in Afghanistan. One of the vital routes of supply to Afghanistan, as well as for withdrawal of coalition troops and military equipment from this country, namely Northern Distribution Network, passes through the Central Asia. This fact seriously worries Russia and China. Both coun-tries believe that the U.S. can use this to strengthen its positions in the region and threaten their interests. This development does not suit either


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Russia or China. Both countries try to prevent undesirable development and formation a new status quo in the region

The Central Asian region is also interested in closer involvement of fur-ther important regional players such as Turkey, Iran and India. All three countries are looking for ways for more active cooperation with the Cen-tral Asian countries. In general, activities of these three countries depend on the presence of the regional states’ interest and loyalty of the key re-gional actors.

Azerbaijan also exhibits its interest in the region. Like the Central Asia, Azerbaijan gained its independence after the collapse of the Soviet Union and faced with similar political and economic challenges. By using its economic potential in a most efficient way, Azerbaijan was able to solve those problems and now it is interested in expanding ties with neighbor-ing countries, including the Central Asian region. Azerbaijan is primarily interested in becoming a transit route for East-West transportation and turning into a transit hub in the center of Eurasia. With the new projects due to be completed soon, the transport infrastructure in Azerbaijan is becoming more relevant for this end. In addition, Azerbaijan is interested in investment in the region, particularly in refinery sector, and export of its products to the markets of the regional states.

In general, this study provides information on the situation in the Central Asian region as a whole and each country of the region in particular, ana-lyzes the main factors affecting their development and current geopoliti-cal and geo-economic situation in the region. In addition, it sets out the position of the main actors which have their own interests in the region and the motives of their actions in a given situation. The last part of the study devoted to the current relations between Azerbaijan and the region of the Central Asia. It also provides a number of recommendations on how to strengthen relations between the parties.


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EMERGENCE OF THE CENTRAL ASIA AS A SINGLE REGION

AFTER THE COLLAPSE OF THE SOVIET UNION

After the collapse of the Soviet Union in 1991, the Central Asian region has become the focus of the main actors of the international system. Situ-ated on a wide area, it consists of five states, the former Soviet republics of Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and Tajikistan. Newly formed countries immediately began to look for ways to estab-lish links with outside world to establish international cooperation and strengthen their statehood. They sought to improve the economic well-being and to attract investment for creating export corridors for their rich energy recources. It should be noted that due to its land-locked location, the countries of the Central Asia with regard to the direct transportation routes to the world markets are dependent on their neighboring countries, primarily Russia.1

Immediately after independence, the Central Asian countries joined the Commonwealth of Independent States (CIS), the structure established by the three Slavic republics of Russia, Ukraine and Belarus, on December 8, 1991, which led to a demise of the Soviet Union. Five days after establish-ment of CIS the leaders of the Central Asian countries met in the Turkmen capital of Ashgabat, where they expressed their readiness to join to the Commonwealth. The president of Kazakhstan Nursultan Nazarbayev sug-gested meeting in Alma-Ata, in order to discuss the next steps that should be implemented to create the structure. On December 21, 1991, 11 heads of states of the former Soviet Union gathered in the capital of Kazakhstan, where they signed the Alma-Ata Declaration. An important point of the declaration was that community members thought possible cooperation on the principle of equality only through coordinating institutions of the Commonwealth, which were not a supranational bodies.2 As it is clear

1 Rovshan Ibragimov (October 01, 12012), Central Asia in the Crossroad of Possible Changes(In Russian: Центральная Азия на перекрестке возможных изменений), Day.az Blog, at http://rovshan-ibragimov.blog.day.az/2012/10/01/centralnaya-aziya-na-perekrestke-vozmozhnyx-izmenenij/ (accessed: January 22, 2013)2 Saltigov (January 01, 2008) To the Question of Establishment of Commonwealth of Independent States (In Russian: К вопросу создания Содружества Независимых Государств), Law.edu.ru, at http://www.law.edu.ru/doc/document.asp?docID=1126873#_ftn2 (accessed: January 22, 2013)


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from this point, the countries did not want a possible degeneration of the Soviet Union in any way, but merely seek common ground for coopera-tion in the initial period of their independence. In this sense, the main determinant for joining the Commonwealth for Central Asian states was to protect economic ties established during the Soviet period. The CIS was sort of a mechanism for the civil collapse of the USSR. Newly in-dependent countries did not want to automatically break the established for decades relationship, without creating new ones. For that period, the Central Asian states have tried to form horizontal level relation-ships among themselves. Soon after independence, in 1992 during the summit of the leaders of the former Soviet Central Asian Republics in Tashkent Kazakh president Nursultan Nazarbayev proposed to use definition of the Central Asia, which also should include Kazakhstan, instead of “Middle Asia and Kazakhstan” definition which were used during the Soviet period.3 Despite that this definition geographically unified all republics of the region, they were unable to form any kind of cooperative or integrative relations among themselves independently. Therefore, there was a need for the foreign actors to manage coordi-nation of activities of the regional states and this mission could most likely to be taken by Moscow. Russia, in its turn, was also interested in close contacts with the countries of the region with the aim to keep its dominance over the region.

Since the region gained independence, it was obvious that in addition to Russia, major interest towards the region would be expressed by China, as a neighbor of the new states and by the United States as the world’s only surviving superpower. It should also be noted that initially many viewed the regional countries as an inevitable “battlefield” of a second “Great Game” among great powers for influence in the Central Asian region. However, the reality was not as expected, neither the U.S. nor China went on open confrontation to realize possible ambitions towards the region.

3 ILgar Valizada (2010), Central Asia and South Caucasus: Integration Processes in the Heart of Eurasia (In Ru ssian: Центральная Азияи Южный Кавказ: интеграционные процессы в сердце Евразии), Baku, p.6


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Map 1: Political map of the Central Asia

Source: http://fs.huntingdon.edu/jlewis/syl/ircomp/MapsCaucasus.htm

RUSSIA AND THE CENTRAL ASIA: DO ALL CENTRAL ASIAN ROADS STILL LEAD TO MOSCOW?

Initially, when the region gained independence after the demise of the former Soviet Union, it was clear that Russia would consider this region as a natural extension of the area of its privileged national interests. As a result, in 1992, Russia announced the doctrine of the “near abroad”, according to which the countries of the former Soviet Union have been declared Russian sphere of political and economic interests. The Central Asian states were also no exception and even more, Russia has paid dif-ferent attention to the region than to the other post-Soviet states.4 The region was even sometimes called as “underbelly” (in Russian - “��4 Ibid, p. 1


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шье”) of Russia, definition firstly used by a famous Russian writer Aleksandr Solzhenitsyn. This definition represents a kind of `buffer zone` which secures Russia’s southern borders. Russia sets out the need for its presence in the Cen-tral Asia as a guarantor of not only regional, but also its own stability and security against challenges that may come primarily from Afghanistan. In this regard, Russia retains contingents of troops in three of five Central Asian countries and has been actively participating in the protection of the Central Asia’s southern borders, i.e. of Tajikistan.

Russian levers of influence in the Central Asia

Currently, Russia has extensive list of levers of influence over the Central Asian countries. Russia and the Central Asia have close ties at the community level, and considerable Russian minority lives in the Central Asia. Currently there are approximately 7mln ethnic Russians living in the regional countries.5 More than half of Russian minority (4.2mln) lives in Kazakhstan and makes up the 24% of population of this country. Ethnic Russians’ share of popula-tion in Kyrgyzstan, Uzbekistan, Turkmenistan and Tajikistan is respectively 12%, 5,5%, 4% and 1,1%.6Along with Russian minority influence of Rus-sian language in the region is important leverage of Moscow over the Central Asian region.16mln people in the region use the Russian language as their main daily communication language which means that over quarter of the population of the region are Russian speaking people. Though Russia has never overtly backed nationalistic minority groups or never mobilized them against their governments, it has used these groups as leverage on the regional governments as promoters of Russian interests inside the countries. Moreover, most of the political and security elite of the Central Asian countries are the “Soviet-product” and accordingly have special attitude towards Russia. Using the influence of the language and human ties, Russia possesses strong influ-ence over the information space of the region. Considerable number of people in the Central Asian receives information from Russian mass media sources in the “Russian interpretation”, which consequently enables Russia capable to easily influence the public opinion in the region. 5 CIA World Factbook, at https://www.cia.gov/library/publications/the-world-factbook, (accessed 21 January 2013)6 Ibid


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Existence of Russian military forces in the Central Asia is another lever, as well as sign of “special attitude relationship” to Russia. Russia has considerable military force in the region including Kant airbase, Anti-submarine Weapons Testing Centre in Issyk-Kul Lake and other laboratories and communication nods in Kyrgyzstan, 201th military base in Tajikistan (the largest Russian base abroad with approxi-mately 7000 soldiers), Sary Shagan anti-ballistic missile testing rage, Balkhash-9 Radar Station, Kastanay military-transportation airbase in Kazakhstan and some other military objects.

Map 2: Russian and American military installations in Kyrgyzstan

Source: http://www.nationsonline.org/oneworld/map/kyrgyzstan-administrative-map.htm

(Locations of military bases were indicated by the authors of the report)

Another lever of Russia over the Central Asian countries is labor mi-grants from those countries working in Russia. Currently more than 3.5


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mln labor migrants from Central Asia work in Russia which is mainly comprised of Uzbek (2 mln), Tajik (1 mln) and Kyrgyz (0.5 mln) mi-grants. Remittances sent to their home countries by these migrants are calculated to be about $7-8 bln annually. For the smaller countries like Tajikistan and Kyrgyzstan remittances sent from Russia are contribut-ing respectively for the 46% and 20% of these countries’ overall GDP.7 Labor migration from the Central Asia to Russia has double effect for the regional countries: firstly, remittances sent by them to their families considerably decreases economic burden on state easing social tension in these countries; secondly, if being forced to leave Russia, labor migrants will potentially join the rows of unemployed and accordingly opposition-minded population of their own countries which might pose considerable threat to the current governments. Therefore, returning back of these big numbers of people to their home countries means emergence of a source of serious social tensions. Russia several times used this tool in nego-tiations with the Central Asian countries. Most recently Tajikistan asked Russia to ease conditions for Tajik migrant workers in Russia in return to prolongation of the lease agreement of Russian military base on Tajiki-stan’s territory.Besides security concerns, Russia also has economic interest in the re-gion, mostly focused in energy area. Until opening Chinese pipelines in 2009-2010 almost all energy export corridors from the Central Asian states to the world markets used to pass through the territory of Russia. For instance, Caspian Pipeline Consortium (CPC) pipeline which was put into use in 2003, transports Kazakh crude oil to Russian Novorossiysk port on the Black Sea and still acts as the single most important energy export route for Astana.8Another important oil transportation route for Kazakhstan is Uzen-Atyrau-Samara corridor. Additional energy transport routes such as Central Asia-Center and Bukhara-Ural gas pipelines which transports natural gas from Kazakhstan, Turkmenistan and Uzbekistan to the European markets are also almost entirely controlled by Russia. 7 Aida Kasymalieva, Erica Marat (2012), Kyrgyz and Tajik Migrants in Moscow Speak Out Publication: Eurasia Daily Monitor Volume: 9 Issue: 19, at http://www.jamestown.org/programs/edm/

single/?tx ttnews%5Btt_news%5D=38939&cHash=b49dc9d6c77020ba8c5e8075ba6762ea (accessed: January 30, 2013)8 Edward C. Chow and Leigh E. Hendrix , (September, 2010) Central Asia’s Pipelines: Field of Dreams

and Reality, the national bureau of Asian research, special report #23, p. 32, at http://csis.org/files/publication/1009_EChow_LHendrix_CentralAsia.pdf (accessed: January 25, 2013)


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At the same time, Kazakhstan also extensively uses Russian territory for exporting extracted oil to the Black Sea ports via railway.Moreover, Russia main rail and highways vital for facilitating Central Asia’s trade with western markets passes through Russian territory which makes regional countries to a certain degree vulnerable to Russia. With the annual trade volume of $27.3 bln (2011) Russia is the region’s top foreign trade partner.9 Provided that, Russia still wants to keep its domi-nant position and control region’s transportation routes to the European markets.

Strengthening multilateralism as Russia’s new means for the long term influence in the region

Russia does not limit its contacts with the Central Asian states on bi-lateral level and also actively encourages the creation of multilateral regional structures. For realization its national interests Russia has initi-ated establishment of a number of regional organizations involving the Central Asian states. Those organizations can be divided into the two groups according to their primary focus: security and economic coop-eration organizations. One of the economic regional organizations is the Eurasian Economic Community (EAEC) founded by Belarus, Rus-sia and Kazakhstan in 1996. Kyrgyzstan joined in 2000 and other two Tajikistan and Uzbekistan in 2005. EAEC aims to provide the countries with a single economic cooperation space for coordinating approaches to the international trading system. Besides to that Russia, Belarus and Kazakhstan are forming Customs Union and launched the Eurasian economic integration process with the purpose to create Eurasian Eco-nomic Union by 2015.10

With regard to the common security issues, Russia is the initiator of the Collective Security Treaty Organization (CSTO) which was created with the purpose to prevent any possible aggression against its member states:

9 Federal Service of State Statistics of Russia, at http://www.gks.ru(accessed: January 26, 2013)

10 RiaNovosti (January 1, 2012), Russia, Belarus, Kazakhstan are launching common economic space, at http://en.rian.ru/russia/20120101/170583110.html (accessed: January 26, 2013)


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Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan. Uz-bekistan was also the member in CSTO but suspended its membership in 2012.11

Another regional institution is the Shanghai Cooperation Organization which is an intergovernmental multilateral security framework founded in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uz-bekistan. Besides the work on security related issues, the organization also addresses socio-economic development issues. Interesting mecha-nism of this organization is that it promotes bilateral cooperation where multilateral cooperation is not politically feasible. Most importantly, the organization helped to unite the efforts of Russia and China, as the main view of this association, in order to develop mechanisms to prevent U.S. involvement in the region.After Vladimir Putin’s return to presidency in 2012 Russia has activated its policies in the Central Asian region. Observing the intensive actions of Washington in the region on the eve of the withdrawal from Afghanistan, as well as understanding the inevitability of the gradual rising of Chinese influence, Russia tries to utilize its current advantageous position in the region to deepen relations with the Central Asian countries and tie them up to Russia for the longer time period. Russia tries to achieve this goal through signing of agreements on realization of big investment projects, writing-off debts of the regional countries, deepening cooperation with them in the military-security sphere, extending the terms of lease of mili-tary bases, and most importantly, attracting them to the membership in or-ganizations led by Russia. Russia wants to include the whole Central Asia to the so called Eurasian Economic Union and sees the Central Asian states’ membership in the Customs Union (CU) and Single Economic Space (SES) as the first step of establishing long term Russian supremacy in the region. Kazakhstan is one of Russia’s closest and most important allies, and is a participant in the CU (together with Russia and Belorus-sia) and SES, as well as other Russia-led organizations such as the Col-lective Security Treaty Organization (CSTO) and the Eurasian Economic Community (EAEC). Despite the recent discontent over Baikonur space 11 Satrapi.com (July 29, 2012) Uzbekistan Suspends Its Membership in CSTO,

at http://www.satrapia.com/news/article/uzbekistan-suspends-its-membership-in-csto/ (accessed: January 27, 2013)


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launch port, Kazakhstan still remains, along with Belorussia, one of the countries enjoying the most developed relations with Russia. Two other Central Asian countries, namely Kyrgyzstan and Tajikistan, are officially considering membership at the CU, however still remain sceptical.12

They are members of both the CSTO and EAEC, and have proclaimed the possibility of joining the CU and SES. Both states are heavily depen-dent on their bilateral security and economic relations with Russia. Rus-sia’s positions in both countries particularly strengthened after Putin’s visits in the last quarter of 2012. During the visit, they signed bilateral agreements with Russia on prolongation of the lease contracts of Russian military bases on their territories, strategic investment and debt write-off accords and other economic and security related agreements. However, it is considered that their final joining to the CU and the SES, if realized, would take several years. The other two post-Soviet Central Asian countries – Uzbekistan and Turkmenistan have different relationships vis-à-vis Russian-led multilat-eral frameworks and Russia in general. Uzbekistan has had a turbulent relationship with Russia. Tashkent joined both the CSTO and EAEC only in the mid-2000s, after Andijan events as Karimov faced serious criticism by West for crackdown of demonstrations. However, slowly rebuilding its relations with U.S. Uzbekistan has suspended its memberships in both – the EAEC in 2008 and CSTO in 2012. The situation with Turkmenistan is to a certain degree similar - Ashgabad’s stance of “positive neutrality” has successfully detached it from very close collaborative arrangements with Moscow.13

Conclusion

Moscow continues to influence and shape many processes in the Central Asia according to its own interests and to a certain degree steer their 12 James Nixey (June 2012), The Long Goodbye: Waning Russian Influence in the South Caucasus and

Central Asia, Chatam House Brifing Paper, The Means and Ends of Russian Influence Abroad Series, at hawk.ethz.ch/.../0612bp_nixey.pdf (accessed: February 16 2012)

13 Stephen Aris (March 04, 2013) Managing Central Asia: Russia’s Approach, Swiss Federal University of Zurich, at http://www.isn.ethz.ch/isn/Digital-Library/Articles/Special-Feature/Detail/?lng=en&id= 160464&contextid774=160464&contextid775=160462&tabid=1454180197(accessed: February 15, 2012)


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economies. In this part of the post-Soviet space, Russia uses human and economic ties, migrants and minority factors, the long-standing, influence of Russian language, military bases, and most importantly multilateral in-stitutional mechanisms in order to retain its preeminent presence in the Central Asia. However, Russia understands the limits of its ability - Rus-sia can be relatively strongest, but not a full-fledged dominant external power in Central Asia. Therefore, in this game Moscow hopes to remain the Central Asia’s leading partner, as it no longer imagines its presence will be exclusive. Accordingly, Russia’s behavior in Central Asia is based on a much more pragmatic approach related to its immediate economic and security interests.Moscow is also pragmatic enough to accept that the Central Asian states are willing to exploit the international competition factor in their own national interests. While accepting Russia as a leading partner, they are prone to invite other powers such as China, the US, Turkey, India, Iran etc. to cooperate and to counter-balance Russian influence. Although all roads in the Central Asia no longer lead to Moscow, Rus-sia’s geopolitical presence in this vast region remains strong and for today Russia is comparatively the most influential foreign actor in the Central Asia.

CHINA AND THE CENTRAL ASIA: A NEW GAME CHANGER OR AN INEVITABLE DOMINANT?

During recent years China has strengthened its positions in various fields in the Central Asia - mainly economic cooperation and energy export, but also politics by means of bilateral relations and multilateral initiatives. In the light of steady expansion of Chinese influence in the Central Asia and intensification of relations with the regional countries many experts talk about the inexorability of the region’s falling under the sway of this powerful neighbor - the process that potentially repre-sents a serious geopolitical concern for the regional countries as well as Russia who tries to attract the region to the new “re-integration” orga-nizations led by Moscow.


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1990s and the beginning of 2000s:Domination of security concerns Despite the current complex frame of engagement with the regional coun-tries, during the course of 1990s, main factors defining Chinese posture in the Central Asia was related to Beijing’s security and stability concerns.14 For that period China was particularly concerned that with the indepen-dence of the Central Asian nations, separatist sentiments could strengthen among Uyghur population of China’s Xinxiang region bordering with the Central Asia and was alarmed about the possibility of establishment of relations of native Uyghur nationalists with Uyghur Diaspora in Central Asia. Threat of the penetration of religious radicalism from the Central Asia to the Western regions of China populated by Muslims was also worrisome issue for Beijing. It is worth to mention that, in this respect, China’s interest coincided with Russia, whose border territories with the Central Asia was also inhab-ited by Muslim-Turk origins Tatars and Bashkirs. All three – China, Rus-sia and the U.S. were concerned with possibility of rise of radicalism in the Central Asia for their own reasons. China and Russia were afraid of spread of radicalism to their territories, the U.S. worried about rise of Iran’s influence as well as international terrorism’s gaining foothold in the region.Moreover, China aimed to support the development of its underdevel-oped western regions via facilitating their trade relations with the Central Asian countries. Therefore, China expressed its support to secularist and stable governments in the region, developed bilateral relations mainly with neighboring Kazakhstan, Kyrgyzstan and Tajikistan, solved the bor-der issues inherited after the Soviet Union’s collapse, established eco-nomic and trade ties with the region.Start of war in Afghanistan in 2001 and establishment of the U.S. mili-tary bases in the Central Asia (Manas base in Kyrgyzstan and Khanabad base in Uzbekistan) brought about new security concerns for China linked with the region, and Beijing had to increase its attention to the

14 Fabio Indeo (2012) The Rise of China in Central Asia, at http://temi.repubblica.it/limes-heartland/the-rise-of-china-in-central-asia/1928 (accessed: January 28, 2013)


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Central Asia.15 Beijing was not comfortable seeing the troops of its main global geopolitical rival stationed close to its Western borders. The U.S. determined entrance in to the region’s “geopolitical game”, as well as coincided interest with Russia on preserving stability and preventing rise of extremism in the region, pushed China to pay more attention to the Shanghai Cooperation Organization (SCO) to balance the U.S. in the Central Asia and increase engagement with the regional countries. The SCO started to become a strategic tool for Chinese ambitions in the re-gion, allowing Beijing to extend its influence also in the security sphere. Growing demand for energy and natural resources as a new driver of Chinese policy in the Central Asia

Rapid grows of demand for hydro-carbon and other natural resources during the last decade, has tempted China for broader engagement in the Central Asia. China, which is set to rise to the world’s largest energy con-sumer by 2030, is worried about meeting its energy demand from Middle East – the region with high risks of destabilization, and via the sea routes – which are uncontrolled by China and can be any time blocked by other superior maritime power, most notably the U.S.16 China recognized the urgency of having alternative import routes of energy resources to the sea routes that was responsible for 100% of Chinese energy imports. In the light of this, China is trying to enhance its economic penetration to the Central Asia – the best positioned region for becoming reliable energy supplier to China with its abundant oil, gas, uranium and other resources.

In 2009 and 2010, Beijing respectively completed the construction of oil and gas pipelines from Central Asia to China which for the first time es-tablished effective alternative export routes for the Central Asian nations to avoid dependence on Russian export pipeline infrastructure. China’s ability to plan, fund and execute deals as comprehensive as the Central Asia-China 15 Alexandros Petersen, KhatinkamBarysch (November, 2011) Russia, China and the geopolitics of energy in

Central Asia, Center for European Reform, at http://carnegieendowment.org/files/Petersen_CER_Eng.pdf (ac-cessed: January 28, 2013)

16 RuoxiDu (2011) Central Asian Energy:A point of Contention or collaboration in Russia-ChinaRelations, at http://kansas.academia.edu/RuoxiDu/Papers/905810/Central_Asian_Energy_A_Point_of_Contention_or_Col-laboration_in_Russia-China_Relations(accessed: January 29, 2013)


22

oil and gas pipelines has raised the bar in the Central Asian energy game. These pipelines has also considerably strengthened the hands of the Central Asian leaders in their energy negotiations with Russia.17 However, it should be noted that, while China expects to increase importing oil and gas from the region, at least, for the short and midterm periods, these imports are likely to act as additional, rather than alternative sources for China.

Map 3: Central Asia-China oil and gas pipelines

Source: https://therearenosunglasses.wordpress.com/2011/09/19/

Chinese investments already covers large number of spheres in the Cen-tral Asia. Chine is not only satisfied with import of oil and gas, but also invests in extraction of hydrocarbons and other natural sources and their refining infrastructure, as well as builds new transportation routes for car-rying those resources to China and ensuring backward flow of Chinese goods into the Central Asian markets. China has become the second largest trade partner of Central Asia and threatens Russian economic dominance

17 Ibid 15


23

in the region.18 Along with the mentioned pipelines, China has extended other types of transportation infrastructure connecting the country with the Central Asia. China has completed two railway lines connecting the coun-try with Kazakhstan in Alashankao passage, as well as has built the new highways linking the country with Tajikistan and Kyrgyzstan. Along with Alashankao line, China confirmed the plan to build a new railway to Cen-tral Asia – China-Kyrgyzstan-Uzbekistan with the cargo transit capacity of the 15 mln tons which it is expected to cost $2 bln for China.19

Chinese credits as a new and important lever of influence of Beijing in the region

Along with already mentioned leverages, China’s main tool of influence over the region is massive amount of credits that Beijing has provided and continues to inject into its Central Asian neighbors. In 2004 Chi-na provided $4 bln of credit to Turkmenistan. In 2011 China allocated another $4,1bln to this country.20 The result of this cooperation did not make itself to wait too long - in 2007, China and Turkmenistan signed a production sharing agreement for the Baktyyarlyk group of gas fields thus making China National Petroleum Company (CNPC) the first and so far the only foreign company to be allowed to exploit Turkmenistan’s rich onshore gas reserves.21 In crises year, China lended $5 bln to each of Kakzahstan Development Bank and KazMunaiGaz.22 In Kazakhstan, the CNPC-controlled company AktobeMunaiGaz is the third largest oil producer after the Kazakh national oil company KazMunaiGaz and the consortia developing Tengiz and Karachaganak. The fourth largest is MangistauMunaiGaz, in which CNPC bought a 50% share in 2009, bringing the total share of Kazakh oil produced by Chinese government-

18 Zabikhulla Saipov (September 01, 2012) China’s Economic Strategies for Uzbekistan and Central Asia: Build-ing Roads to Afghan Strategic Resources and Beyond, Eurasia Daily Monitor Volume: 9 Issue: 172, at http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=39873 (accessed: February 01, 2013)

19 Roman Muzalevski (2012) China-Kyrgyzstan-Uzbekistan Railway Scheme: Fears, Hopes and Prospects, Eur-asia Daily Monitor Volume: 9 Issue: 102, Jamestown Foundation, at http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=39434 (accessed: January 30, 2013)

20 Ibid 1521 Ibid 1522 Stephen Blank (2009) China’s Recent Central Asian Energy Moves // Central Asia-Caucasus Institute Analyst,

20, at http://www.cacianalyst.org/?q=node/5110 (accessed: February 01, 2013)


24

controlled entities to 19%.23 By 2013, this number has risen to a quarter of the overall oil production of Kakzahstan. Other Central Asian republic, Tajikistan’s debt to the Export-Import Bank of China is now hovering around $880 mln – amounting to a hefty 40% of the country’s total ex-ternal debt.24

Giving billions of dollars to the Central Asian countries through state controlled banks, China has deprived western financial institutions of their influence mechanisms in this field. Problems with paying back these credits that can possibly emerge in the long-term period, may force Cen-tral Asian countries to be more accommodative to China’s interests and orientate foreign policy towards Beijing. Even now, China uses these credits for getting advantageous contracts for extracting strategic re-sources of the Central Asian countries that Chinese economy is in need of. One more factor that makes Chinese credits more attractive for the Central Asian countries is that, contrary to Western credits, Chinese cred-its did not come along with any other demands for democracy and human rights reforms. However, it is quite possible that in future China will use these credits to accelerate the processes of taking the Central Asian coun-tries’ economies under its control, and penetrating Chinese labor force and industrial goods into the region.

Attempts for soft power influence and “cautious expansion” approach to the region

In addition to other leverages of influence, China is adopting a “soft power” strategy based on cultural exchanges, language training, higher education in order to better promote its image in the Central Asia. Sev-eral Confucius Institutes has been opened in the capitals of Central Asian republics (aimed to teach Mandarin language) which is the “soft power” card that the Chinese government handily played in the region.25

However, it is interesting that China is not making any steps towards 23 International Energy Agency ( 2010) World energy outlook 2010 24 Reuters (June 2012) SCO Summit Kicks Off, Tajikistan Indebted to Resource-Hungry China,

KariReport, at http://karireports.com/2012/06/06/sco-summit-kicks-off-tajikistan-indebted-to-resource-hungry-china/(accessed: February 03, 2013)

25 Ibid 14


25

overt domination of the region, opening military bases, at least, for guar-antying security of its investments in the region. As it was put by Lango, “The move into the Central Asia is happening without much fanfare, in sharp contrast to the assertive Chinese tone in the Southeast Asia.”.26 Bei-jing understands that being too much assertive can fuel the grows of ex-isting China-phobia among local population and elites, as well as bring about Russia’s active resistance against China while Beijing is not ready and willing for this kind of confrontation.

Conclusion

China increasingly views the Central Asia as an important destination for investment and trade, as well as sees the region as a source of hydro-carbon imports that could reduce Beijing’s risky dependence on maritime routes. However, despite the growing Chinese interest in the Central Asia, the region is not one of the priority regions for China and in the short term perspective, Beijing does not consider it worthwhile to pub-licly challenge Russia in the Central Asia. China understands that despite the fact that its position is steadily strengthening in the region, for now Beijing’s influence in the region does not match with that of Moscow. Therefore China seems to prefer the strategy of gradual increasing eco-nomic penetration and political cooperation with the region, and balanc-ing its relations with Russia in the Central Asia, most notably using the framework of the Shanghai Cooperation Organization. The Central Asian countries, in their turn, try to use China for diversify-ing their foreign relations, export markets and investment sources. They recognize the possible dangers of rising “Chinese expansionism” in the region and certain China-phobia is already present among the population of the Central Asia. Therefore, while understanding the inevitability of the rise of the Chinese influence vis-a-vis Russia and the U.S., and trying to take as much as possible advantages from cooperation with China, the Central Asian republics seek for ways of firmly ensuring their long-term sovereignty. 26 Hans-IngeLangø (February 18, 2011) China’s westward expansion into Central Asia,

Hegemonicobsessions.com, at http://hegemonicobsessions.com/?p=183(accessed: February 04, 2013)


26

THE U.S. AND THE CENTRAL ASIA: HOW FAR IS THE U.S. FROM THE CENTRAL ASIAN REGION?

For more than a decade after the 9/11 attacks, the war in Afghanistan has been the point of reference for U.S. policy toward the Central Asia. American military bases in the region and the region’s role in facilitat-ing the supply chain for U.S. and NATO troops were the main concerns of U.S. policy throughout the period. On the eve of the U.S. drawdown in Afghanistan, the Central Asian countries seem worried that the with-drawal will downgrade their importance for Washington. It is argued both in and outside the region that U.S. engagement in Central Asia will be weakened, leaving regional countries exposed to extremist-jihadist threats from south as well as the influence of powerful neighbors such as Russia and China. Despite their efforts to maximize their economic and military gains from the withdrawal process, the Central Asian countries would still prefer to benefit from ongoing U.S. commitment to the region.

The U.S. strategy in the Central Asia before and after the 9/11 attacks

Between 1990 and the start of the war in Afghanistan in 2001, the U.S. had shown no particular interest in a strong presence in the Central Asia. American diplomatic presence was mainly limited to missions in the cap-itals of countries in the region. The most important private sector engage-ment was Chevron’s hand in the development of Kazakhstan’s Tengiz oil field. Washington also helped regional countries to establish, with vari-ous degree of success, new energy transportation and supply routes that bypass Russia in order to thwart a return of Russian dominance in the region. Another important U.S. interest in the Central Asia was inhibiting a possible surge of religious radicalism that could also increase Iran’s in-fluence in the region.27 Therefore, for much of the early 90s, Washington focused on promoting Turkey as a state model for the Central Asian coun-tries. Having a secular government and common ethnic roots with four of the five Central Asian states, Turkey was viewed by American strategists 27 Ipak Shark (2002) Central Asia: Geoeconomics, Geopolitics, Security (In Russian: Центральная Азия:

геоэкономика, геополитика, безопасность), Tashkent, p. 93


27

as a very suitable model for the “democratization” and “Westernization” of the region. However, these “underinvested” efforts were not received well in the region and soon proved unsuccessful. The Central Asia’s strategic value for the U.S. came to prominence after the September 11, 2001 terrorist attacks and the start of the Afghan war. Since late 2001, military operations in Afghanistan have been a driving force of increased U.S. involvement in the Central Asia. Uzbekistan’s Karshi-Khanabad Air Base and Kyrgyzstan’s Manas Air Base have both hosted - the latter still does - U.S. military installations and troops sup-porting Afghan combat operations. Moreover, cooperation with other regional countries in the “global war on terror” further bolstered the U.S. presence in the Central Asia. During this period, Russia, still weak and engaged in an internal consolidation of power under Vladimir Putin, failed to impede the U.S. strengthening its position in Central Asia. During the mid-2000s, certain events caused Central Asian governments to question U.S. goals in the region, and even tempted them to re-orient their foreign relations toward Russia; notably, the Bush administration’s support for the “color revolutions” across the post-Soviet area, its back-ing of regime change in Kyrgyzstan, and its promotion of civil society, as well as Russia’s gradual resurgence due to its immense energy rev-enues helped to change the atmosphere.28 “The U.S. military presence in Uzbekistan came to an end in 2005, when the Bush administration reproached the country’s leadership for the bloody crackdown on demon-strations in Andijan, and Tashkent ejected U.S. military forces and again began searching for a closer relationship with Russia. The U.S. military’s inability to achieve ultimate victory in Afghanistan also negatively im-pacted the U.S. image in the region.Consequently, the last years of the Bush administration and first years of the Obama administration were marked by the gradual decline in the U.S. positions in the Central Asia. Moreover, under the Obama Adminis-tration’s “reset” policy with Russia, U.S.-Russia relations eclipsed U.S.-Central Asia relations.

28 Jim Nichol (January 09, 2013) Central Asia: Regional Developments and Implications for U.S. Interests, Congressional Research Service, at http://www.fas.org/sgp/crs/row/RL33458.pdf (accessed: January 30, 2013)


28

Approaching withdrawal from Afghanistan and reactivation of U.S.�Central Asia relations

Recently, in light of the approaching 2014 withdrawal of the majority of U.S. combat troops from Afghanistan, Washington has been intensifying contacts with the Central Asian countries located on the Northern Distribution Network (NDN) routes. The NDN was first established in 2008-09 after talks between the U.S., the Central Asian states, and Russia as a bunch of routes that allowed the U.S. and NATO to ship nonlethal supplies to Afghanistan “without going through Pakistan and the Khyber Pass – logistical arrangements exposed to Taliban attacks as well as massive delays due to Pakistani obstruction.”29 Af-ter Salala incident of November 2011, involving U.S. aerial strikes that killed 24 Pakistani soldiers and injured 13 others, Pakistan closed all NATO supply lines to Afghanistan passing through its territory. Lines remained closed for more than half of a year which massively increased the NDN’s importance for the U.S. In order to guarantee the smooth functioning of the distribution network, the U.S. promised countries in the NDN part of its Afghan military equipment and more financial aid.30 During this time Uzbekistan has again become the main Central Asian partner of Washington. Currently a large per-centage of U.S. military cargo going to Afghanistan passes through Uzbeki-stan, and Uzbekistan has seized this opportunity to build closer military ties with the U.S. Uzbek president Islam Karimov, in negotiations with U.S. of-ficials, stated his wish for refurbishing his military forces, replacing its Rus-sian gear entirely American. Accordingly, “in late 2011 Washington loosened restrictions on military aid to Uzbekistan that had been in place for nearly a decade due to human rights concerns.”31 As the U.S. promises to leave some of its equipment behind in the Central Asia after withdrawal, Karimov has reportedly expressed interest in heavy equipment, like helicopters and mine-resistant armored vehicles. 29 Stephen Blank (March 8, 2013), The US in Central Asia: Beyond Afghanistan?, ESN,

at http://www.isn.ethz.ch/isn/Digital-Library/Articles/Special- Feature/Detail/?lng=en&id=161009&contextid774=161009&contextid775=161006&tabid=1454205962 (accessed: March 21, 2013)

30 Joshua Kucera (June 15, 2012 ) Russia Opposes U.S. Military Donations To Central Asia, Eurasianet, at http://www.eurasianet.org/node/65555 (accessed: February 22, 2013)

31 Joshua Kucera(March 27, 2013) Great Game in Central Asia after Afghanistan, The Diplomat, at http://the-diplomat.com/2013/03/27/the-great-game-in-central-asia-after-afghanistan/2/ (accessed: April 25, 2013)


29

Map 4: Major U.S. logistics routes to Afghanistan

Source: http://www.washingtonpost.com/national/national-security/a-logistics-mira-cle/2011/07/02/AGZDwnvH_graphic.html

The U.S. interests in the Central Asia after 2014

Many argue that the Central Asia is bound to become less central to U.S. foreign and security policy following the drawdown of forces in Af-ghanistan. Even so, it will still remain consequential.32 Though the end of operations in Afghanistan will substantially decrease U.S. interests in the region, Washington will still have significant stakes in preventing the emergence of failed states that serve as a safe haven for international ter-

32 Jeffrey Mankoff (2013) The United States and Central Asia after 2014, Center for Strategic and International Studies, at http://csis.org/files/publication/130122_Mankoff_USCentralAsia_Web.pdf (accessed: February 21, 2013)


30

rorism, avoiding regional conflicts which can draw in neighboring powers (some of them nuclear), disrupting drug-trafficking via the Central Asia etc. The U.S. will also cooperate with regional countries to combat the rise of religious extremism and terrorism within their borders. Moreover, as Joshua Kucera claims, “having entrée to the Central Asia, it enhances the U.S. ability to influence developments in Afghanistan—as well as Pakistan—which both face worsening insurgencies and the growth of radical forces.”33 Continuing U.S. interests in the Central Asia, also in-clude supporting the development and diversification of the region’s en-ergy resources and supply routes. This issue is also closely linked to Af-ghanistan, but in a more forward-looking way.34 In 2011, former Secretary of State Hillary Clinton promoted a vision for a New Silk Road, which was presented as a major U.S. contribution to the regional development for the post-2014 period. The “New Silk Road” strategy aims at directing regional transportation routes southward, passing through Afghanistan to reach Pakistani and Indian markets and ports on the coast of the Indian Ocean. This vision was designed to direct public and private investment in such a way as to transform Afghanistan into a central transportation hub and facilitate its economic development and regional integration.

Conclusion

Even though U.S. priorities are shifting at the global level, Washington will continue to have important interests at stake in the Central Asia that require sustained engagement. Therefore, despite its limited assets and interests, ignoring the role of the U.S. in the Central Asia’s geopolitics would be unwise. Regional countries are still trying to balance the influ-ence of Russia and China through engagement with the U.S. Now, the question that will define the future of the U.S. in the region is whether the country will fully withdraw from Afghanistan after 2014. Clearly, a full withdrawal that leaves the country open to the threat of chaotic collapse would be an imprudent direction for the U.S. The statement from Deputy 33 Joshua Kucera (February 06, 2013) Does the U.S. Have Any Interests In Central Asia?, Eurasinet, at http://

www.eurasianet.org/node/66515 (accessed: February 22, 2013)34 Marlène Laruelle (September 2012) U.S. Central Asia policy: Still American Mars versus European

Venus, EUCAM Policy Brief, Open Society Foundation, at www.fride.org/download/PB_26_Eng.pdf


31

Secretary of State for the Southern and Central Asia Robert Blake, saying that “the U.S. will maintain its presence in Afghanistan and the Central Asia after 2014” promises that the U.S. is not going to do that.35 Ameri-can troops remaining in the region will ensure the United States’ ability to influence events in the wider Central Asian region, as well as maintain pressure on Russia, China, Iran and Pakistan.

35 Trend (23 April 2013) State Department: USA to maintain presence in Afghanistan and Central Asia after 2014, at http://en.trend.az/regions/world/usa/2142664.html(accessed: April 24, 2013)


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THE ROLES OF OTHER REGIONAL ACTORS IN THE CENTRAL ASIAN POWER GAME: TURKEY, IRAN AND INDIAThough main powers who interest and interactions are effectively defin-ing the geo-strategic picture of the region are Russia, China and the U.S., they are not alone in this “Central Asian game”. Other regional powers, notably Turkey, Iran and India have their own interests and policies in the region, each of them tries to influence the region through different frameworks.

TURKEY AND CENTRAL ASIA: FROM ROMANTIC TURKISH UNITY POLICY TO REALIST ECONOMIC AND POLITICAL PARTNERSHIPWhile geographical proximity, economic and security interests have act-ed as the main determinants of the involvement of the other actors in the regional processes, Turkish engagement with the Central Asia has evaluated in different way. Main factor that stipulated the intense Turkish engagement with the Central Asian countries, particularly in the begin-ning of 1990s, was ethnic ties of Turkey with 4 out 5 Central Asian na-tions. Kazakhstan, Turkmenistan, Uzbekistan and Kyrgyzstan share the same ethnic background with Turkey – they are Turkic speaking coun-tries. Therefore, examining Turkey’s role in the geopolitical process in the Central Asia is more about Turkish efforts to establish close relation with “Turkic World” and accordingly will be mainly discussed through that framework.

Three periods of Turkey’s relations with the Central Asian republicsThe end of the Cold War and the demise of the Soviet Union drastically changed the international political environment for Turkey. “East-West” confrontation was no longer the major topic and dissolution of the So-viet Union opened up new spaces of activity for Turkey in the South-Caucasus and Central Asia. The Turkish government started to undertake considerable efforts to adapt the country’s foreign relations to the new situation. Turkey’s policies in Central Asia from the end of 1980s untill nowadays can be classified into three periods. The first period covers


33

the transition era in the Soviet Unionbetween 1989-1991 and can be caracterized as“an adapting to a new environment” during which Turkey mainly pursued a Moscow-centric policy in its relations with the Central Asian states. Thus, when confronted with the opportunity to establish relations with the individual Soviet republics after Gorbachev’s “glasnost” and“perestroika”policies began to open the closed Soviet system, Turkey still was observing a policy meticulously designed to avoid giving any perception of seeking to undermine the existing USSR.36 Accordingly, until mid-1991, Turkey avoided establishing official ties with the Central Asian republics though initial steps towards creating contacts were taken by private companies and individuals. However, particulary after the “August coup” in Moscow that inflicted the final blow to the Soviet regime and made the absolute collapse inevitible in the eyes of everyone, Turkey gradually started to increase its attention to the region. Ankara recognized independence of all regional countries in December 1991 and the new period of Turkey-Central Asia relations started. It can be called as “euphoria” period and lasted between 1991-1993. Among Turkish officials, the conviction re-emerged that Turkey “has a special role to play in international affairs” in the Caucasus and Central Asia.37 Given the ethnic, historical and religious background of the Central Asian countries (to a certain degree save Tajikistan), and the role-model that Turkey assummingly represented for them, Ankara started to believe that Turkey will achieve its goal of dominating role in the Central Asia without any diffuclties, region’s Turkey-oriented foreign policy would become a natural process. Moreover, the U.S. also favorably looked at Turkish model role in the Central Asia which aimed to counter-balance Russian and Iranian influence in the region by Turkey.38

In 1992, Turkey founded a Turkish Cooperation and Coordination Agency to realize various development projects in the Turkic speaking countries of the Central Asia. With Ankara summit of 1992, Turkey launched the tradition of Summits of Heads of States of Turkish Speaking Countries 36 Mustafa Aydin (2004) Foucault’s Pendulum: Turkey in Central Asia and the Caucasus, Turkish Studies,

Vol. 5, No. 2, Summer 2004, pp.1–2237 Heinz Kramer (2012) Will Central Asia Become Turkey’s Sphere Of Influence, Center for Strategic Studies

of Turkey, at http://sam.gov.tr/wp-content/uploads/2012/01/8.-WILL-CENTRAL-ASIA-BECOME-TURKEYS-SPHERE-OF-INFLUENCE.pdf(accessed: February 27, 2013)

38 Bulent Aras (15 April 2008), Turkish policy toward Central Asia Today’s Zaman, at http://www.todayszaman.com/news-141729-turkish-policy-toward-central-asia.html (accessed: February 27, 2013)


34

some of which later took place in the capitals the Central Asian countries. A year later, 4 Turkic speaking republics of the Central Asia, together with Turkey and Azerbaijan established organization named TURKSOY for creating fertile ground for cultural cooperation among the member states. Ankara provided credits to the Central Asian countries through Turkish EXIMBANK. In spite of the conviction in Ankara about the inevitability of orientation of the Central Asian region, particularly four Turkic speaking countries, toward Ankara, relations with these countries that started in very posi-tive spirit had not always evolved into solid cooperation; on the contrary, ties lessened due to Turkey’s naive and mistaken conviction that they could be maintained without much effort because of historic and ethnic ties.39 Since 1993, serious disappointment and resentment followed on both sides which marked the beginning of a period classified as “from euphoria to despair” which lasted until 1995. The problem was more of an expectation gap - Turkey and Central Asian republic had different ap-proach to the nature of their bilateral relations. Firstly, Ankara expected that the Central Asia would naturally accept Turkey as an “elder brother” while the Central Asian countries, who had just freed from Russian rule, viewed relations with Turkey as tool for strengthening independence and achieving wider international recognition. Not surprisingly, Kazakhstan president Nazarbayev once noted that we did not break up from Russia to substitute one “elder brother” by another.40

Secondly, these countries expected from Turkey tangible economic sup-port, credits for saving their crumpling economies while Turkey was not economically and politically ready to meet all demands of the Central Asian states. The Central Asian nations became increasingly disenchanted with the Turks, who they realized could not deliver much of the expected economic aid and were not able to counterbalance the dominating Russian position. Seeing the insuffi ciency of Turkey’s aids and declarative char-Seeing the insufficiency of Turkey’s aids and declarative char-acter of support they decided not to jeopardize their relations with Russia 39 Ceren Kumova (December 27, 2011) Turkey commits heart and soul to Central Asia, just not strongly

enough, Today’s Zaman,at http://www.todayszaman.com/news-266876-turkey-commits-heart-and-soul-to- central-asia-just-not-strongly-enough.html (accessed: March17, 2013)

40 Rovshan Ibrahimov (October 13, 2010) New Period In Turkish Foreign policy – 2nd Part (In Turkish: Türk dış politikasında yeni dönem ve Türk Cumhuriyetleri ile ilişkiler: Bağımsızlıktansonra ilk dönem- romantik ilişkiler - 2 kısım), 1news.az, at http://www.1news.com.tr/yazarlar/20101013050040711.html (accessed: March 17, 2013)


35

without any solid backing from other power.Under the frustration, the Central Asian leaders started to lower the level of their official representation in the Turkish summits and Uzbekistan quit-ted its cooperation since 1995. Even Turkish EXIMBANK credits which were initially very positively accepted by the Central Asian countries, later, due the high interest rates, were declined, and problems emerged between Turkey and the Central Asian countries for paying those rates.41 Turkey, on the other hand, “disappointed with the less than enthusiastic reception it got in the region and considerable coolness of the regional leadership to any form of an umbrella organization to coordinate relations between Turkic states”, in turn became disillusioned and dissatisfied with its continued presence in the Central Asia.42

Under the light of the surfacing problems in Turkey’s relation with the Central Asian countries, since 1995, Turkey started to revise its perception and policies of the region. Ankara decided to change its strategy in the region from euporic and romantic policies of ‘Turkish unity’ and Turkey’s natural leadership to a more pragmatic and economically grounded strategies. Thus, the new period which could be called “establishemnt of pragmatic and practcal relations” that continues up to day, started. Ankara began to establishrelations with the Central Asian republics based on common economic interests and focused on realization of concrete economic projects and programs. Despite the slow speed of progress, bi-lateral relations finally started to have solid basement for future develop-ment. Contrary to the 1990’s, “elder brother”, natural leader and Turkish World rhetoric was replaced by Ankara’s focusing on equal partner treat-ment and mutual respect strategies.However, it should be mentioned that in the end of 1990s, at the result of certain domestic political processes, as well as recognition of Turkey as candidate prospective for the EU membership, the imporance of relation with Europe gained overwhelming importance for Turkey and resulted in a decrased attention of Ankara towards relation with the Central Asian.43 41 Rovshan Ibrahimov (October 21, 2010) New Period In Turkish Foreign policy – 3rd Part (In Turkish:

Türk dış politikasında yeni dönem ve Türk Cumhuriyetleri ile ilişkiler: Bağımsızlıktan sonra ilk dönem- romantic ilişkiler - 3 kısım), 1News.com.tr, at http://www.1news.com.tr/yazarlar/20101021035040697.html (accessed: March 17, 2013)

42 Ibid 3843 Ramazan Özdamar (April 22, 2010) Turkish Policy in the Central Asia: Shortcomings and

Recommendations (In Turkish: Türkiye’nin Orta Asya Politikası Eksiklikler ve Öneriler), Caspianweekly,


36

Since mid-2000s, when Turkey started gradually gain self-confidence to develop a more durable and constructive policy toward the Central Asia which reflected in the rise of Turkish engagement in the region.44 Frustration with continues delay in the EU membership which lead AKP government to increase the “eastern dimension” positively affected Tur-key’s economic and political relations with the Central Asia. Now Turkey seems to be aligning its foreign policy in a way that will close the gap and revive old partnerships with Central Asian states.

Currents relations: Economic interests and rise of Turkey’s role as an economic partner

The current intensive interest towards Asia is clear reflection of three factors in Turkish foreign policy: growing Turkish economy’s need for new markets, a quest for new strategic alliances to reduce dependence on west, and realization of the shift in global balance of power towards Asia.45 Different than the romantic the Central Asian policy of 1990s, cur-rent Turkish policy towards Central Asia is driven by geopolitical forces of Turkic identity, strategic interest, energy security and economic profit-ability calculations.46

Turkey’s domestic energy security considerations play vital role in shap-ing its new the Central Asian policy. In 2011, Turkey imported more than 90 percent of its total oil consumption and the country’s oil imports are expected to double over the next decade. For natural gas consumption Turkey is almost 100% dependent on imports.47 In order to meet the ris-ing demand and ensure energy security Turkey wants to diversify import routes and views the Central Asia as one of the future energy suppli-ers. Moreover, Turkey plans to become energy hub in the region. Ankara

at http://tr.caspianweekly.org/ana-kategoriler/orta-asya/1555-tuerkyenn-orta-asya-poltkasi-eksklkler-ve- oenerler.html (accessed: March 18, 2013)

44 Bulent Aras (April 15, 2008), Turkish policy toward the Central Asia Today’s Zaman, at http://www.todayszaman.com/news-141729-turkish-policy-toward-central-asia.html (accessed: March 17, 2013)

45 Ibid 46 Michael Moreland (June 19, 2012) Turkey Deepens Imprint in the Central Asia, Atlantic Sentinel,

athttp://atlanticsentinel.com/2012/06/turkey-deepens-imprint-in-central-asia/(accessed: March 19, 2013)47 U.S. Energy Information Administration (February 1, 2013) Turkey Report, US Energy Information

Administration, at http://www.eia.gov/countries/cab.cfm?fips=TU (accessed: March 19, 2013)


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wants to acquire political and financial gains via becoming the transit route for Middle Eastern and Caspian energy resources to Europe. For the short and mid-term perspective, main energy interests of Tur-key in the Central Asia is persuading Turkmenistan to participate in the Trans-Caspian Gas Pipeline (TCGP) project which will facilitate Turk-menistan’s joining to the Trans-Anatolian Pipeline (TANAP) gas cor-ridor. Azerbaijani-Turkish initiated TANAP project initially planned to have 16 bcm/a of transportation capacity; it could be eventually increased to as much as 60 bcm/a in the future in order to export large amounts of Turkmen gas.48

Under the new circumstances, Turkey also intensified trade relations with Asian countries including the Central Asia which serves the solid politi-cal relations. Parallel to the rise in Turkey’s total foreign trade (which in-creased from $82 bln in 2000 to $389 bln in 2012 increasing by 474%49), Turkey’s total trade with Asian countries is rapidly growing which have actually been rising more than 50% faster than the overall foreign trade of Turkey.50 This tendency found its reflection on Turkey’s trade with the Central Asian countries as well. During the mentioned period, Turkey’s trade with the Central Asian countries has risen from $0.9 bln ($0,55 bln of import and $0,35 bln of export) to $7 bln ($3.6 mln of import and $3.4 mln of export) of trade turnover making Turkey an important trade part-ner for the Central Asian region.51 Turkey’s investment has also steadily growing in the Central Asia during past years and in 2010 exceeded $4,7 bln.That year the total value of projects realized by Turkish contracting companies in the region has reached a level of around $50 bln. Nearly two thousand Turkish companies have been operating in the Central Asia by 2010.52

48 Vladimir Socor (September 11, 2012) Turkey Sees Opportunity in Trans-Caspian Gas Pipeline Project, Eurasia Daily Monitor Volume: 9 Issue: 164, at http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Bswords%5D=8fd5893941d69d0be3f378576261ae3e&tx_ttnews%5Bany_of_the_words%5D=Turkmenistan&tx_ttnews%5Btt_news%5D=39826&tx_ttnews%5BbackPid%5D=7&cHash=3699bb78ec96d26aac9d4564774493d7(accessed: March 20, 2013)

49 Turkey Statistics Agency (2013) Trade relations with foreign countries, at http://www.tuik.gov.tr/VeriBilgi.do?alt_id=12(accessed: March 21, 2013)

50 Mustafa Kutlay&SalihDoğan (January 13, Thursday, 2011) Turkey and Central Asia: Modern Economic Linkages along the ‘Silk Road’, Turkish Weekly, at http://www.turkishweekly.net/op-ed/2786/turkey-and- central-asia-modern-economic-linkages-along-the-39-silk-road-39-.html (accessed: March 17, 2013)

51 Ibid 5152 Ministry of Foreign Affairs of Turkey (2013) Turley’s relations with Central Asian republics,at http://www.mfa.gov.tr/turkey_s-relations-with-central-asian-republics.en.mfa (accessed: March 21, 2013)


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New institutions for more effective multilateral cooperation

Understanding the importance of institutionalization for multilateral partnership, Turkey also tries to promote more efficient organizational frameworks between Turkey and Turkish speaking Central Asian states.53 Kazakhstan and Kyrgyzstan, (along with Azerbaijan in the South Caucasus) are members of Cooperation Council of Turkic-Speaking Countries (CCTS) together with Turkey which was established with the aim of promoting more comprehensive and permanent cooperation among Turkic Speaking States.54 In January 2013 Turkey, Kyrgyzstan, and Azerbaijan founded a joint military organization, “Eurasian Law Enforcement Organization of Military Status.” The purpose of this organization is to foster cooperation between the Cen-tral Asian Turkish republics, and to prepare a fertile ground for common de-fense.55

Frustration with the unclearness in EU membership and strengthening east-ern dimension of Turkey’s foreign policy have also resulted in intensification of Turkey’s relation with SCO which is another institutional framework that includes the Central Asian countries. In January 2013, prime minister Erdo-gan, and later President Gül mentioned about Turkey’s bid for possible SCO membership and it is particularly important that the SCO can provide Turkey with another means of deepening its still modest political engagement with the Central Asia, and in a framework acceptable to Russia and other coun-tries that remain wary of what can appear to be neo-Ottoman, or rather pan-Turkic, aspirations regarding the Turkic nations of the Central Asia.56

ConclusionTurkey’s relations with Central Asian countries have passed through sev-eral stages. Soon after the collapse of the Soviet Union Turkey launched a Central Asian policy based on with very positive and unrealistic expec-53 Muammer Ekshi (2009) Turkiye’nin Orta Asiya politikaları, Academia.edu,

at http://www.academia.edu/1474347/Turkiyenin_Orta_Asya_Politikasi (accessed: March 21, 2013)54 Ibid 4155 Bilal Ciplak, (January 28, 2013)Turkey and Central Asia: the “Eurasian Law Enforcement Organization

of Military Status”, Balkanchronicle.com, at http://www.balkanchronicle.com/index.php/world/world- news/muslim-world/2820-turkey-and-central-asia-the-eurasian-law-enforcement-organization-of- military-status (accessed: March 23, 2013)

56 Richard Weitz (July 9, 2012) Turkey Raises Central Asian Profile through SCO Link, Turkey Analyst, vol. 5 no. 14, at http://www.silkroadstudies.org/new/inside/turkey/2012/120709B.html (accessed: March 23, 2013)


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tations in Ankara coming from the idea that Turkish dominance of the region was natural. However, soon euphoria faded away when Central Asians and Turks realized that Turkey is not in a position to provide po-litical and economic assistance and security guarantees that Central Asian republics expected. Consequently bilateral relations of Ankara with Cen-tral Asian states experienced to serious cooling and downgrading. Later, with new pragmatic and rational policies, as well as mutually beneficial economic projects Turkey managed to reconstruct its reliable image in Central Asia and increase is political and particularly economic engage-ment with the region. While this period was not also so smooth, several issues coming from internal politics of Turkey, changes in strategic think-ing in Turkey about its foreign policy paved a way to developing Turkey-Central Asia relations to a new level.

IRAN AND THE CENTRAL ASIA: A CONTENTIOUS PARTNER FOR THE REGION

Soviet collapse: Opportunities and challenges for Iran in the Central Asia

Collapse of Soviet Union and emergence of five independent republics in the Central Asia meant a sudden transformation of geopolitical envi-ronment surrounding Iran which brought about new opportunities and challenges for this country. Soviet collapse ended the presence of “evil empire” on Iran’s northern frontier and Iran gained chances to revitalize its historical ties with the Central Asian countries that shared the same religious and civilization background with Tehran. Independence of the Central Asia also meant opening up the region for Iran’s economic ac-tivity which could be very valuable asset for Tehran in terms of help-ing to ease international isolation and the impact of economic sanctions. However, independence of the Central Asia in 1991 caught Iran unready for this kind of major change when Iran’s primary concerns were still very domestic: it was only 3 years that Islamic regime emerged from the devastating eight-year war with Iraq; the regime’s domestic economic and social situation was tense, death of Khomeini in 1989 further in-


40

creased the fragility of domestic stability.57 At the same time Iran felt uncomfortable with the spread of influence of other powers to fill the emerged power vacuum in the Central Asia after the Soviet collapse. Teh-ran viewed Turkey’s activation in Central Asia as a particularly danger-ous development for Iran’s national interest. Ankara, after all, was seen as close ally of the United States, and a return of pan-Turkism would endanger Iran’s position in the region, even could trigger the rise of the nationalistic feelings of ethnic groups in Iran with Turkic background.58 Not surprisingly, soon after the collapse of Soviet Union, Iranian officials began expressing concern about the rapid progress of Turkey in the Cen-tral Asia.59

Islamic identity of Mullah Regime and its impact on Tehran’s Central Asia policies

When the Central Asian states gained independence from Soviets, Iran had certain advantages and disadvantages for building close and coop-erative relations with its Central Asian neighbors. Iran was geographi-cally proximate to the Central Asia and directly bordered with the region, enjoyed historical/cultural ties with it. Tehran could offer partnership to the newly independent states of the Central Asia which would meant for them diversifying their foreign economic and political relations, acquir-ing a new source of investment and gaining access to open seas in Persian Gulf. Despite the mentioned advantages of Tehran, Iran had serious dis-advantage in the eyes these new neighbors – Islamic identity of the ruling regime. In the beginning of 1990s, the Central Asian countries were quite wary that Tehran could possibly seek to export the idea of religious revo-lution to the Central Asian region. Regardless of the fact that overwhelm-57 Svante E. Cornell (2003) Regional Politics in Central Asia: the Changing Roles of Iran, Turkey, Pakistan and China, SAPRA Foundation, India and Central Asia: Building Linkages in an Age

of Turbulence, at http://www.silkroadstudies.org/pub/030720Sapra.pdf (accessed: March 27, 2013)58 Mehmet Alagoz (2008) The New Great Game and Ira: Iran’s Foreign Policy in Central Asia in post

Soviet Era, Bilgesam, at http://www.bilgesam.org/en/index.php?option=com_content&view=article&id=117:the-new-great-game- and-iran-irans-foreign-policy-in-central-asia-in-post-soviet-era-&catid=77:ortadogu- analizler&Itemid=147(accessed: March 29, 2013)

59 SebastienPeyrouse and SadykzhanIbraimov (August 17, 2010) Iran’s Central Asia Temptations, Current Trends in Islamist Ideology,Vol. 10, at http://www.currenttrends.org/research/detail/irans-central-asia-temptations (accessed: March 30, 2013)


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ing prevalence of Sunni Islam seriously curbed Iran’s capabilities to ex-ert influence over religious sphere of the region, in 1990s, many experts voiced exaggerated concerns about Iran’s intention of spreading Islamic regies to the Central Asia. These concerns were not groundless, since Iran had connections with certain religious groups in the Central Asia, including the Islamic Renaissance Party of Tajikistan. Tehran indirectly participated in the overthrow of the government of Rakhmon Nabiev in Tajikistan in 1992 and repeatedly hosted leaders of United Islamic Oppo-sition during the civil war in that country.60 Additionally, Iran supported several religious foundations in the region and attempted to contribute Islamic revival in the Central Asia by distributing religious books, train-ing mullahs in Iran and opening schools and mosques in the Central Asia countries.61

However, contrary to the expectations, Tehran never launched the much-feared campaign of Islamisation in the Central Asia. Instead, caution and realism has ususally been a major determinant of the foreign policy of Iran toward its neighbours in the Central Asia.62 Iran’s relations with re-ligious groups in the Central Asia remained low profile and Iran never gave major support to any group in this region like it was in Afghani-stan or Iraq. Instead, understanding sectarian differences (shia-sunni) and secularist oriantation of the Central Asian societies and ruling authorities, after several years of confusion in the beginning of 1990s, Iran considered its more prudent to establish pragmatic relations with the Central Asian states in the economic, political and cultural spheres.

Varying level of development of relation with regional countries

The Iranian influence was at first confined to Tajikistan alone, in light of their linguistic and cultural proximity. Iran was one of the first countries to extend diplomatic recognition to Tajikistan, and the first to establish an embassy in Dushanbe. Despite initial ties with Islamic opposition, Teh-60 Ibid 6161 Ibid 6062 Svante E. Cornell (2003) Regional Politics in Central Asia: the Changing Roles of Iran,Turkey, Pakistan and

China, SAPRA Foundation, India and Central Asia: Building Linkages in an Age of Turbulence, p. 4, at http://www.silkroadstudies.org/pub/030720Sapra.pdf (accessed: March 30, 2013)


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ran supported peace track in Tajik civil war. Iran’s later efforts to bring an end to the civil war in this country, were welcomed by the Tajik govern-ment, and garnered considerable political capital and goodwill towards Iran.63 Along with many other smaller investment projects, in 2006, Iran’s Sabir Company contributed $39 mln worth of goods and services to help Tajikistan construct the Anzab tunnel, which was opened by the partici-pation of the presidents of two countries. Iran has also helped Tajikistan with the construction of the Sangtudeh-2 power plant project which was completed in 2011.64

Iran gives special importance to Turkmenistan, which is the single the Central Asian state that borders with Iran. Two countries have realized several regionally important projects such as gas pipelines and railway constructions. Kazakhstan is another relatively important partner for Iran, while Kyrgyzstan with its geographical farness and small size economy largely remained out of Tehran’s focus. Uzbekistan, uneasy about Is-lamist tensions in the Fergana Valley, had the most complex relations with Islamic regime during 1990s. Though currently two states have better re-lation in comparison with 1990s, Uzbekistan continues to be the Central Asian country most reluctant to develop good neighborly relations with Iran.65

Current strategic interests of Iran in the region: Regionalism, economic engagement and infrastructure development

Currently, Iran seeks to develop economic and political cooperation with Central Asian countries that can help Tehran regime to escape from international isolation and become capable withstanding economic pres- and become capable withstanding economic pres-sure on the country put by international sanctions. The imporance building this kind of relationship with Central Asian neigbours is constantly rising

63 Brenton Clark (April 10, 2012) Persian games: Iran’s strategic foothold in Tajikistan, Opendemocracy.net, at http://www.opendemocracy.net/od-russia/brenton- clark/persian-games-iran%E2%80%99s-strategic-foothold-in-tajikistan (accessed: March 27, 2013)

64 Ariel Farrar-Wellman, Robert Frasco (July 7, 2011) Tajikistan-Iran Foreign Relations, Irantracker.org, at http://www.irantracker.org/foreign-relations/tajikistan-iran-foreign-relations (accessed: March 25, 2013)

65 SebastienPeyrouse (April 2012) The Iranian Nuclear Crises as Seen from Central Asia, On Wider Europe, German Marshall Fund, at http://www.centralasiaprogram.org/images/GMFUS-Iran_seen_from_CA.pdf (accessed: March 26, 2013)


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for Iran since the U.S. is continuesly pushing for more harder sanctions against it. To accomplish these interest Iran emphasizes “regionalism” which aims at gainining political and economic influence in the Cen-Cen-tral Asia, intensifing relations with the regional countries through the regional frameworks such as Tehran headqurtered Economic Cooperation Organization (ECO), Organization of Islamic Conference (OIC), as well as establishing close partnership with Shanghai Cooperation organization (SCO). For deepened regional engagement and economic partnership, Iran tries to expand its infrastructure connecting the country to the Central Asia, especially its railway network linking Iran with the region. By doing that Iran also aims to become an attractive trade and transit partner for the regional countries. Tehran offers the Central Asian states to use its ter-Tehran offers the Central Asian states to use its ter-ritory for exporting goods to the world market through Indian Ocean, as well as westward towards Turkey. In 1996 with construction of Ma-shad-Sarakhs railway Iran acquired rail access to the Central Asia via Turkmenistan. In 2010 Tehran inked new agreement with Ashgabat for construction of new 550 miles rail line to connect Iran with Kazakhstan.66 Though Turkmenistan unexpectedly terminated the contract amounted $700 mln in September, 2012, the Turkmen and Kazakh part of the con-struction is almost ready for use; Iran is expected to complete its own part within Iranian territory.67 In 2010 Ahmadinejad and Berdimuham-madov inaugurated gas pipeline Dovletabad-Sarakhs-Khangeran, which along with already existing 12 years old Korpedje-Kurtkui gas pipeline, ensured the capacity of the annual exports of 20 bcm/a of Turkmen natu-ral gas to the Iran.68 Iran imported 10.2 bcm/aof gas from Turkmenistan in 2011, main part of which was re-exported to Turkey.69 Moreover, Iran presents opportunities for the regional countries, particularly for Kazakh-stan to export oil to open seas via the Persian Gulf through oil swap in the Iran’s Caspian port Neka. 66 Ashley Cleek (September 13, 2012) Turkmenistan: Ashgabat Stops Iranian Railroad Project in its

Tracks, Eurasianet, at http://www.eurasianet.org/node/65910 (accessed: March 21, 2013)67 Arzu Naghiyev (2 November 2012) Central Asia as Iran’s savior, Trend,

at http://en.trend.az/news/politics/2083404.html (accessed: March 23, 2013)68 Turkmenistan.ru (07 January 2010), New Turkmenistan - Iran gas pipeline launched,

at http://turkmenistan.ru/?page_id=3&lang_id=en&elem_id=16118&type=event&sort=date_desc (accessed: March 24, 2013)

69 Trend (October 22, 2012)Iran cuts Turkmen gas imports by 52 percent, at http://en.trend.az/regions/iran/2079590.html (accessed: March 23, 2013)


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Challenges for developing relations with the Central Asian countries

Currently, there are several contentious issues in Iran’s relations with the Cen-tral Asian states that remain unresolved and undermine Iran’s efforts to expand economic and political engagement with the Central Asia. One of the important concerns is dispute over the legal status of the Caspian Sea, as Iran is now the latest actor to refuse to adopt the majority opinion of the median line.70 Iran ag-gressively demands to increase its share of the Caspian Sea from current 13% to 20% which, if happens, will happen at the expense of other littoral states, including the Central Asia countries such as Turkmenistan and Kazakhstan. Iran’s nuclear strategy is another factor that raises concern in the Central Asian countries about Iran. In fact, none of them openly criticize Iran’s nuclear am-bitions, and even in November 2011, Nazarbayev publicly blamed world community for biased treatment of Iran versus same attempts of Pakistan and Israel.71 However, as proximate neighbors of Iran they have serious security concerns about rising hard power of Iran and its acquiring nuclear weapon. They would prefer to see Iran as part of their already existing “Nuclear Free Zone” instead of regional power armed with nuclear strike capability. Fearing the negative regional impact of possible U.S. strike on Iran, the Central Asian states would like to see more accommodative Iran towards international com-munity’s demands, instead current harsh and confrontation-oriented rhetoric of Tehran. Though not as significant as in the beginning of 1990s, religious nature of Teh-ran regime acts as a disadvantage of Iran for close engagement with the Central Asian countries. Fear of Islamization still remains as a part of agenda in Central Asia which makes the regional countries to approach to all Iranian policies in the region with certain suspicions. Finally, U.S. sanctions exert negative impact on grow of economic and politi-cal relations between Iran and the Central Asia and realization of joint projects. Prospective of undergoing U.S. sanction in case of engaging in partnership with Iran curbs willingness of the Central Asian companies to do business with their Iranian counterparts.70 Ibid 6171 SebastienPeyrouse (April 2012) The Iranian Nuclear Crises as Seen from Central Asia, On Wider

Europe, German Marshall Fund, at http://www.centralasiaprogram.org/images/GMFUS-Iran_seen_from_CA.pdf(accessed: March 23, 2013)


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Conclusion

Collapse of the Soviet Union and emergence of new independent states in Central Asia represented both a challenge and new opportunities for Iran. Iran was happy to see in the North, instead of mighty Soviets, smaller states with which Tehran could cultivate economic and political relations. At the same time Mullah Regime felt threatened with the possibility of Iran’s being affected by “sovereignty trend” in its immediate neighbor-hood and the prospects of Central Asian power vacuum’s being filled by “adversary” and “undesired” powers such as the U.S. and Turkey. Despite wide spread belief and reservations in the region, religious identity of the Mullah regime has never overwhelmingly affected Iranian strategy to-wards Central Asia, on the contrary Tehran’s approach to the region was mainly built on pragmatism and rationality. From 5 Central Asian states Tehran has developed the closest relations with Tajikistan which shares the same ethnic and linguistic background with Iran while Uzbekistan remains the most skeptical Central Asian state about Tehran’s intensions in the region. Currently Iran seeks to strengthen its economic coopera-tion with region which can help Tehran to ease the impact of Interna-tional sanctions and break its isolation. Therefore, currently, in its policy in Central Asia, Iran mainly asserts regionalism, strengthening economic engagement and development of transportation infrastructure to link the country to the region. However, despite these efforts there are several is-sues such as Iran’s aggressive stance in the dispute around division of the Caspian Sea, nuclear ambitions of Tehran, as well as religious identity of the Mullah regime and U.S. sanctions towards not only Iran but also the companies working with Iran, negatively affects willingness in Central Asia to strengthen engagement with Iran and hampers development of the bilateral relations.


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INDIA AND THE CENTRAL ASIA: TIME FOR A MORE COMPREHENSIVE STRATEGY

Despite its geographical proximity and economic potential, as well as growing strategic interest, India seriously lags behind other regional actors in the Central Asia and has only recently declared connecting the Central Asia and South Asia as one of the priority foreign policy goals. In fact, In-dia has had several handicaps which resulted in two decades delay in New Deli’s active engagement in the Central Asia. In the early 1990s, India had just embarked on a policy of economic reforms, and it was in no position to exploit trade and investment opportunities with these new republics. Un-til the last few years, India had concentrated its economic and diplomatic resources on its “Look East” policy which focused on the development of wide-ranging relations with Southeast and East Asia.72 Moreover, direct transportation routes linking India and the Central Asia which could allow trade and other exchanges were restricted by serious political barriers such as war in Afghanistan and unwillingness of Pakistan to allow rise of India-Central Asia trade relations, as well as by formidable geographical barrier such as high altitude Himalayan Mountain Range. However, over the last two to three years, India has shown insistence in its efforts to correct this oversight - particularly as economic growth has facilitated these attempts. Currently India has considerable economic and security interests, as well as geopolitical considerations that tempt India for increased engagement with the Central Asian countries. India has put forward Connect Central Asia policy in order to develop cooperation with the region, as well as proposed and launched several infrastructure projects in order to acquire strategic reach to the region and link it with India.

India’s growing strategic interests in the Central Asia

Similar to Chine, as an emerging “global economic powerhouse”, Indian economy will require vast quantities of oil and natural gas in near future to support its economic grows. At present, India is the 4th largest oil and 7th 72 Mary Carras (July 17, 2012) India’s Gambit in the Central Asian Abyss Foreign Policy in Focus,

at http://www.fpif.org/blog/indias_gambit_in_the_central_asian_abyss (accessed: February 21, 2013)


47

largest gas consumer in the world.73 The country’s oil demand is expected to increase to two hundred million tons by 2025.74 Currently Middle East is the main supplier of hydro-carbon resources to India; however, New Deli actively seeks to decrease its dependence on this volatile supplier. The energy rich and proximate Central Asian region is one of the best positioned potential candidates to become important energy provider for India. It should be mentioned that despite the lack of energy transporta-tion infrastructure to deliver the region’s hydro-carbon resources to India, New Deli has already started to establish its presence in the energy sector of the region. Indian Prime Minister Manmohan Singh’s visit to Astana in 2011 helped India to gain access to the North Caspian Sea region, a known repository of oil and gas as well as Kazakhstan’s rich uranium resources. India’s ONGC Videsh Limited (the overseas arm of Oil and Natural Gas Corporation) was allowed to pick up a 25% stake in the KazMunaiGaz-run offshore Satpayev oil block in 2012. 75

However, Indian economic interests in the Central Asia is not limited only to import of energy resources, but also other raw materials vital for grows of industrial production such as iron ore, coal and other miner-als. Steel giant ArcelorMittal already owns metallurgical plants and coal mines in Kazakhstan. Moreover, supplying growing population with food also tempts India to be interested in “vast tracts of land available for large-scale commercial farming in the Central Asia.”76 Generally, it is considered that along with hydro-carbon resources, India is interested in cooperation in mining, agriculture, IT, hydropower and pharmaceutical sectors.77

Other interest of India in the Central Asia is related to security consider-ations of New Deli. According to many experts, the “arc of instability” that threatens India begins from the Fergana Valley, densely populated core of the Central Asia, covers the whole Afghanistan, Pakistani tribal 73 BP Statistical Review of World Energy (2012),

at http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statisti-cal_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_report_2012.

74 Amit Ranjan (September 14, 2012), Central Asia: India’s New Strategic Neighborhood , Atlantic Sentinel,at http://atlanticsentinel.com/2012/09/central-asia-indias-new-strategic-neighborhood/ (accessed: February 22, 2013)75 Ibid76 Jyoti Prasad Das (2012) India’s ‘Connect Central Asia’ Policy, Foreign Policy Journal,at http://www.foreignpolicyjournal.com/2012/10/29/indias-connect-central-asia-policy/(accessed: February 21, 2013)77 Ibid 52


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area and ends up in Kashmir, in the north-west of India.78 Looming al-lied pullout in 2014, increases the importance of regional cooperation for India to prevent possible destabilization in its North-Western frontiers. The fresh memory of 2001 attacks against Indian parliament and the 2008 Mumbai attacks serve as a chilling reminder in Indians’ minds of the fact that safe havens for terrorists have yet to be eradicated.79 Therefore, India seems inclined to cooperate with the Central Asian countries in the field of security in order to cope with possible threat of destabilization of Af-ghanistan and spillover of the instability across the region. Accordingly, India seeks to strengthen cooperation with regional countries in the areas such as counter-terrorism, military training, research, and development.80

It should be mentioned that militarily, India has had a weak presence in the Central Asia compared to the U.S. and Russia. The Tajik-Indian rela-tions are crucial in establishing India’s military presence in Central Asia but previous efforts to station a group of Indian military personnel in Ayni airbase near Dushanbe have been thwarted by Russian influence that led to delays and subsequent cancellation of what would have been India’s first military base overseas. Active engagement of China – India’s geopolitical rival - in the Central Asia, and establishing of infrastructure to import the Central Asian natural resources to China and export back Chinese goods is another reason that tempts India not to stand idly and intensify its relations with the regional countries for acquiring access to the natural resources and local markets.

Connect Central Asia policy

In June 2012, Indian Minister of State for External Affairs, E. Ahmed, in a key note address at the 1st meeting of the India-Central Asia Dialogue, organized in Bishkek, unveiled a new mechanism planned to become the 78 Ibid 5279 Shalini Sharan (Feb 27, 2012) Central Asia: India’s real strategic depth, Center for Strategic and

International Studies, at http://csis.org/blog/central-asia-indias-real-strategic-depth(accessed:February 21, 2013)

80 Roman Muzalevsky (September 27, 2012) India’s ‘Connect Central Asia’ Policy Seeks to Compensate for Lost Time, Eurasia Daily Monitor Volume: 9 Issue: 176, at http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=39891 (accessed: February 21, 2013)


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important tool of New Deli for further developing India-Central Asia re-lation - Connect Central Asia policy (CCAP). The policy calls for set-ting up universities, hospitals, information technology (IT) centers, an e-network in telemedicine connecting India to the Central Asian Repub-lics, joint commercial ventures, improving air connectivity to boost trade and tourism, joint scientific research and strategic partnerships in defense and security affairs.81 If to be successfully realized, this policy can give a boost to the development of Indian engagement in Central Asian re-gion. Indian government and business has already activated contacts with their Central Asian counterparts for advancing mutual cooperation via this framework. However, despite the CCAP’s main focus on cooperation in the areas less dependent on infrastructure linking India to the Central Asian region, developing transportation infrastructure still remains a des-perately needed component to facilitate the increase of trade turnover with the region and import of strategic mineral resources that growing Indian economy is in need of.

Transportation infrastructure: A much needed component

Currently Indo-Central Asia bilateral trade stood at about a $0.5 bln per annum, which is way below the full potential.82 Trade will take a quantum jump only if transportation bottlenecks can be safely overcome. In order to overcome that bottleneck - bypass the political and geographical barri-ers on the trade routes linking India with the Central Asia, New Deli tries to realize theNorth South Transport Corridor (NSTC) project. According to the project, the Iranian port of Chahbahar will serve as India’s gateway to Afghanistan through the Zaranj – Delaram Roadway (ZDR) in Nimroz Province, built with India’s assistance. The ZDR is connected to the Gar-land Highway which links up with the Central Asia.83 The port’s expansion and connection with Afghanistan will deepen India’s ties with energy-rich Iran; help it access the Central Asian markets without relying on Pakistan; through the Iranian port of Bandar Anzali on the Caspian coast India will be able to get access Russia; most importantly ZDR will help India to connect 81 Ibid 5682 Ibid 5283 Ibid 52


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with Afghanistan and the Central Asia bypassing Pakistan. India already spent $136 mln to link Chabahar to the ring road in Afghanistan, where it has invested $2 bln in infrastructure over the past decade and has sought to exploit the Hajigak deposits reportedly worth from $1 trl to $3 trl.84

Another regionally important transportation project, Turkmenistan-Af-ghanistan-Pakistan-India (TAPI) gas pipeline which will begin from the Dovletabad gas field and end in Fazilka on the Punjab border is hoped to become the backbone project of India-Central Asia energy relations and Map 5: Proposed route for TAPI pipeline

Source:http://www.transitionistas.com/2013/03/21/americas-dumb-south-asian-petro-diplomacy/

reduce India’s energy imports from the Middle East.85 If realized, $7.6 bln84 Gulshan Sachdeva (2012) India’s Objectives in Central Asia, School of International Studies,

Jawaharlal Nehru University, at http://uschinacenter.as.nyu.edu/docs/IO/23889/Sachdeva_Abs.pdf (accessed: 20 February 2013)

85 Ibid 56


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pipeline (considering the current material costs, it could rise well beyond $10 bln threshold) will have a capacity to carry 90 mcm/d of gas for a 30-year period and is likely to become operational by 2018. India will receive 38 mcm/a, remaining 52 mcm/dwill be supplied Pakistan and to Afghanistan (38 and 14 mcm/d respectively).86

One more option for establishing transport corridor between India and Central Asia is U.S. initiated New Silk Road Project which aims at directing Central Asian main transportation arteries southward to pass Afghanistan and reach Pakistani and Indian markets. The main goal of the U.S. project is to facilitate Afghanistan’s development and re-gional integration through turning it into a transit corridor. Generally, the U.S. seems inclined to support India over its growing role in this part of the World, and as the U.S. Ambassador to India Nancy Powell put it “Washington can work with Central Asianstates and New Deli to make the Central Asia an attractive place for Indian investment.”87 Un-derstanding difficulties of upholding mass-commitment to the Central Asia to counter-balance Russia and China, the U.S. may consider sup-porting India as balancer against those to powers once did via support-ing Turkey. Already declared New Silk Road Strategy may certainly be facilitating Indian engagement with the region, however it has sev-eral handicaps as well. The Central Asian countries appears not to be so keen to make the proposed route the main direction of their foreign trade, and even if successfully realized, this route will still continue to pass Pakistani territory which makes it unreliable in the eyes of Indians.

Conclusion

India’s economy needs the Central Asian energy, mineral and other re-sources in order sustain its growth. Stability and security concern is an-other factor tempts India for closer cooperation with the Central Asian republics. Moreover, India’s regional competitor’s – China’s rapid pen-etration into the Central Asia further pushes India to intensify relations 86 The Hindu (May 23, 2012) TAPI pipeline gas sale agreement signed,

at http://www.thehindu.com/business/Economy/tapi-pipeline-gas-sale-agreement- signed/article3449588.ece (accessed: May 29, 2013)

87 Ibid 56


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with the regional countries. Being late for about two decades to actively engage with the Central Asian countries, India seems quite determined to compensate for this lost time. India is knocking at knocking at the Cen-tral Asia’s door, wants to get its portion of energy and mineral resources, invest in the regional countries and establish trade routes bypassing Paki-stani territory.


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AZERBAIJAN’S RELATIONS WITH THE CENTRAL ASIAN COUNTRIES: TRADE, ENERGY, INVESTMENT AND TRANSPORTATION

The Central Asia is a massive region located in the immediate neigh-borhood of Azerbaijan, inhabited by nations sharing common religion, language, historical and cultural backgrounds. The Central Asia is home for more than sixty million people, is abundant with energy and other mineral resources, and has strong potential for becoming a market for Azerbaijani goods and services, destination for Azerbaijani investments and partner in creating new energy and transportation corridors. Growing economic capabilities and investment potential of Azerbaijan paves the way to the activation of the country’s foreign and economic policy in the new regions of the word far beyond the national and re-gional boundaries. The Central Asia is one of those regions which have strong prospective to become the one of the priority areas of Azerbaijan’s foreign economic relations. Rise of the Azerbaijan’s regional reputation, initiation and successful realization of several regionally important proj-ects has also increased the political and economic credibility of Baku in the region and also fuelled the intensification of mutual contacts with neighbors across the Caspian Sea. The geographical proximity of Azerbaijan to the region, as well as shared common roots and background means that Azerbaijan and the Central Asian states are bound together by a net of common interests and con-cerns.88 Azerbaijan has common border with the two out of five Cen-tral Asian states - Kazakhstan and Turkmenistan via the Caspian Sea. It should be noted that seabed division of the Caspian Sea on the me-dieval line agreed and confirmed by agreement with Kazakhstan, while with Turkmenistan there is border dissent arisen from the dispute over Kyapaz/Serdar oil/gas field jurisdiction. Nevertheless, disagreement with Turkmenistan does not prevent cooperation between the two states.At the same time, four out of five countries in the Central Asia are Turkic speaking countries. Azerbaijan and all Central Asian republics are mem-88 Shirin Akiner (Spring 2012) Kazakhstan’s relations with the South Caucasus states, Caucasus International,

Vol: 2 No: 1, pp. 157-175


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bers of the Commonwealth of Independent States (CIS), the Economic Cooperation Organization (ECO), Organization of Islamic Cooperation and the Organization for Security and Co-operation in Europe (OSCE). Azerbaijan cooperates with Turkic speaking Central Asian nations within the framework of Turkic Council, TURKSOY and Parliamentary Assem-bly of Turkish Speaking Nations (TurkPA). During recent years bilateral and multilateral relations between Azerbaijan and Central Asian neigh-bors have been experiencing notable development. Regularity of the mu-tual visits of the heads of the states and other high ranking officials vis-ibly heightened. In 2012 three Central Asian presidents, Islam Karimov, Almazbek Atambayev, Emomali Rahmon visited Baku, during last three years President Ilham Aliyev met with all five Central Asian presidents within the various multilateral frameworks, discussed developing politi-cal and economic relations and addressing common concerns. This part of the report talks about the Azerbaijan’s relations withtheCen-tral Asian countries, examines main trends of trade with them, as well as scrutinizes the three most import fields for Azerbaijan to cooperate with the regional countries, namely as (1) export of the regions hydro-carbon resources through Azerbaijan’s pipeline systems, (2) investment in the regions oil refinery business and (3) establishment the South Caucasus-Central Asia transportation corridor.

Trade between Azerbaijan and the Central Asian states

With the annual trade turn-over of about $578 mln, the Central Asian region is one of the important trade partners of Azerbaijan. The largest trade partner of Azerbaijan in the Central Asia is Kazakhstan which is the 16th largest trade partner of the country. Azerbaijan has positive trade bal-ance with 4 Central Asian countries; however considerable negative bal-ance in trade with Kazakhstan (due to the large volumes of grain imports) brought about overall negative balance with the Central Asia - $189 mln. Many factors, such as excessive cheap labor force, abundance in raw ma-terials, lack of language barrier (Russian language is widely spoken in both regions), geographical proximity etc. makes the region very advan-


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tageous for the foreign economic activity and appropriate place for in-vesting for Azerbaijan. Azerbaijan has agreement on visa free travel with almost all the Central Asian countries (excluding Turkmenistan) which positively impacts development of relation between Azerbaijan and the region. However, it should be mentioned that there is huge potential to further develop trade relations with the Central Asian and current volume of the trade does not appropriately represent the potential of mutual eco-nomic interaction between Azerbaijan and the Central Asian countries.

Main indicators of Azerbaijan’s trade with the Central Asian countries in 2012Overall trade

turnover Export Import Balance

Total 577,912 193,979 383,933 -189,954Kazakhstan(percentage share) 393,43 (68%) 52,875 (27,3%) 340,555 (88,7%) -287,68

Uzbekistan(percentage share) 19,793 (3,4%) 11,523 (5,9%) 8,27 (2,2%) 3,253

Kyrgyzstan(percentage share) 91,624 (15,9%) 58,915 (30,4%) 32,709 (8,5%) 26,206

Tajikistan(percentage share) 44,149 (7,6%) 43,990 (22,6%) 0,159 (0,04%) 43,831

Turkmenistan(percentage share) 28,916 (5%) 26,676 (13,6%) 2,240 (0,6%) 24,436

Source: State Statistics Committee of Azerbaijan Republic http://www.stat.gov.az

Azerbaijan’s trade relations with the Central Asian countries in 2012 in graphs:

Source: State Statistics Committee of Azerbaijan Republic http://www.stat.gov.az/


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Azerbaijan’s trade with the Central Asian countries in the last three years

Source: State Statistics Committee of Azerbaijan Republic http://www.stat.gov.az/

Export of the Central Asian hydro�carbon resources through Azerbaijan’s pipeline systems

Ensuring the safe and continues export of hydro-carbon resources to the World market has always been the common interest of Azerbaijan and the Central Asian countries since restoration of independence in 1991. However, Azerbaijan and the Central Asian countries, notably Kazakh-stan and Turkmenistan have had their own export strategies - these some-times coincided, and sometimes diverged. Kazakhstan has been prone to joining to BTC-an alternative export route since it was first proposed by Azerbaijan, though “Kazakhstan’s first priority of Kazakhstan during 1990s was construction oil pipeline from Tengiz Field on the northern Caspian to the Russian Black Sea port Novorossiysk.89 The first sign of serious progress in Azerbaijan-Kazakhstan cooperation in the field of oil transportation came in October 1998, when with the strong U.S. backing, Azerbaijan, Turkey, Georgia and Kazakhstan signed Ankara declaration on construction of pipeline from Baku to the Turkish Mediterranean cost.

89 Ibid 85


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BTC became operational in May 2005 and Kazakhstan started to export its oil through BTC in October 2008. However, in early 2010 the Astana suspended exporting its crude via the conduit after the BTC shareholders raised transit fees for the country.90 Therefore, nowadays the only Central Asian country that exports its oil through the BTC is Turkmenistan. Current annual oil production of Turkmenistan is about 11 mln tons a year and Baku-Tbilisi-Ceyhan (BTC) pipeline serves as an important exports route for Turkmen oil.91 In 2011, 2.237 mln tons of Turkmen oil were delivered to world markets via the BTC, the volume of exported oil reached to 3.048 mln tons in 2012.92

Map 6: Baku-Tbilisi-Ceyhan pipeline

Source: http://www.bu.edu/law/communications/lecroy.shtml

Neverthless, with the recent offical statements about possibility of restoration of oil exports through the pipeline by kazakh officials, major Central Asian oil for export through the BTC is expected to come from Kazakhstan. Kazakhstan’s oil extraction will be immensily increased in 90 Azerinews (January 25, 2011) Kazakhstan seeks to resume BTC oil exports at, http://www.azernews.az/

oil_and_gas/29002.html (accessed: May 09, 2013)91 BP (June 2012) Statistical Review of World Energy, at http://www.bp.com/assets/bp_internet/globalbp/

globalbp_uk_english/reports_and_publications/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_report_2012.pdf (accessed: May 10, 2013 )

92 ABS.az (January 14, 2013) Turkmen oil transportation via BTC pipe exceeds 3 million tons for 2012, at http://abc.az/eng/news/70879.html (accessed: May 10, 2013 )


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near future, most notably, due to the start of the production in its super-giant offshore Kashgan field, which pushes the government to seek for new export routes. Kashagan is one of the largest oil fields in the world, which is located in the north of the Caspian Sea. It holds an estimated 30bln barrels of oil-in-place, of which 8-12 bln are potentially recov-erable. Natural gas reserves are estimated at over 1tcm.93 After several delays Kazakhstan finally plans to receive the first oil from Kashagan field in late 2013. When the 3rd phase of production will be launched in the field, the annual oil extraction in the field will peak at about 87mln tons (1,5mln barreal per day) which is approximately equal to the Kazakhstan’s current annual oil production.94 Obviously Kazakhstan’s exisitng pipelines systems (even considering their modernization plans) will not be enough for exporting this amount of oil. Kazakhstan exported 29 mln tons of its oil via the Caspian Pipeline Consortium (CPC) in 2012 and the volumes of Kazakh oil transported via the pipeline are to increase to 52 million tons after expansion of the pipeline.95Around 15 mln tons of Kazakh oil was supplied via the Atyrau-Samara pipeline in 2012 and the capacity of the pipeline is not planned to be expanded.96 Kazakhstan exported about 11mlntons of oil was delivered to China in 2012 through Kazakhstan-China pipeline and with further expansion the capacity of the pipeline will reach up to 20 mln tons per year.97

It is clear that combined exporting capacity of all these pipelines will not be enough to meet the Kazakhstan demand for export in near fu-ture and Astana may again consider using the BTC for exporting its oil to the Western markets. Not surprisingly, Kazakh oil minister Sauat Mynbayev stated at the energy forum in Astana, in October 2012 that Kazakhstan may to transport its oil through the Baku-Tbilisi-Ceyhan oil pipeline (BTC) given spare capacity and favorable commercial terms.98 93 E. Kosolapova (25 December 2012) Azerbaijan, Kazakhstan negotiate to create infrastructure to

transport Kashagan oil, Equites.com, at http://www.equities.com/news/headline-story?dt=2012-12-25&val=860983&cat=energy (accessed: May 11, 2013 )

94 Joanna Lillis (October 16, 2012) Kazakhstan: Kashagan Oil Soon to Flow, EurasiaNet, at http://www.eur-asianet.org/node/66055 (accessed: May 11, 2013)

95 Azernews (2 October 2012) Kazakhstan says may resume BTC oil exports, at http://www.azernews.az/oil_and_gas/44321.html (accessed: May 11, 2013)

96 Ibid97 Kazmunaiqaz (2011) Kazakhstan-China oil Pipeline, at http://www.kmg.kz/en/manufacturing/oil/kazakh-

stan_china/(accessed: May 12, 2013)98 Russia & CIS Business and Financial Newswire (2 October 2012) Kazakhstan may pump oil through BTC

pipeline on certain conditions – minister, at http://business.highbeam.com/407705/article-1G1-304155888/


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According to him, for restoration of the exports two sides should agree on the mutually acceptable transit fees. Currently it is expected that large amounts of Kazakh oil from Kashagan may go through Azerbaijan during the implementation of the second phase, which is scheduled for 2018-2019.99

Two countries already have a project under consideration–the Trans-Cas-pian oil Transportation System (TCOTS) which aimes at facilitating ef-ficient shipment of large volume Kazakh oil across the Caspian, to Azer-baijan to be pumped into BTC. The state energy companies of Azerbaijan (SOCAR) and Kazakhstan (KazMunaiGas) signed an agreement about the basic principles of creating TCOTS.100 As part of the project, a new infrastructure will be built for this purpose on the Kazakh coast of the Caspian Sea. Notably, the Eskene-Kuryk oil pipeline is to be constructed, the Kuryk seaport expanded, and new tankers with a loading capacity of over 60,000 tons purchased for use in transporting crude through the Caspian for further pumping into the BTC in Azerbaijani territory.101 Ini-tially it was planned that the system will be ready by 2012-2013, however repeated delays in start of production in Kashagan field caused delay of realization of this project as well.It should be noted that, the partnership in delivering the Central Asian energy resources to the world market through Azerbaijani territory is not only limited to oil, but also there are ongoing talks about the pos-sibility of transportation of Central Asian gas through the country as a part of the Southern Gas Corridor project. In September 2012 the EU’s Energy Commissioner Guenther Oettinger, Turkish Energy and Natural Resources Minister Taner Yildiz, and Azerbaijani delegates held talks with President GurbangulyBerdimuhammedov and other Turkmen of-ficials in Ashgabat in order to discuss the possibility of transport of Turkmen gas to Europe via Azerbaijan. Later that year Azerbaijan and EU reaffirmed their commitments to closely cooperate with Turkmeni-stan in drafting an Azerbaijani-Turkmen-EU agreement on the planned

kazakhstan-may-pump-oil-through-btc-pipeline-certain(accessed: May 13, 2013)99 Aynur Jafarova (January 11, 2013) Azerbaijani companies may be involved in creation of Kazakhstan logistics

center, Azerinews, at http://www.azernews.az/business/48431.html (accessed: May 15, 2013)100 Azernews (November 19, 2008) Azerbaijan, Kazakhstan boost effort on trans-Caspian project, at http://www.

azernews.az/oil_and_gas/8724.html(accessed: May 13, 2013)101 Ibid


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pipeline.102 Currently, Azerbaijan, Turkmenistan and EU continue nego-tiations on Trans-Caspian gas pipeline. As it was mentioned in February

Map 7: Planned Southern Gas Corridor through Azerbaijan

Source:http://www.eurasia-energy-observer.com/news/new/the-frail-corridor

Note: In June 2013 Shah Deniz consortium selected Trans-Adriatic Pipe-line (TAP) as the main delivery route for Caspian gas to Europe.103

2013 by Natig Aliyev, Azerbaijani Minister of Industry and Energy, the sides were working on preparing the project of two documents: “The first project is political document and has to be signed by the head of the three states and president of the European Commission Jose Manuel Barroso. This document will be political support to the implementation of the cor-ridor and register again importance of construction of the Trans-Caspian gas pipeline. The second document is the Azerbaijan-Turkmenistan inter-governmental agreement on the construction of the project.” 104

102 Contact.az, (December 22, 2012) EU, Turkmenistan and Azerbaijan continue cooperation on trans- caspian gas pipeline, at http://www.contact.az/docs/2012/Economics&Finance/121800021795en.htm#.UadQ7dLwZ_4 (accessed: May 17, 2013)

103 New Europe (July 16, 2013) Shah Deniz pipeline if choice is TAP, at http://www.neurope.eu/article/shah-deniz%E2%80%99s-pipeline-choice-tap (accessed July 16, 2013)

104 Azertag (February 07, 2013)Azerbaijan, Turkmenistan and EU discuss Trans-Caspian gas pipeline project, at http://www.azertag.com/en/node/1053048 (accessed: May 17, 2013)


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Turkmenistan states it is ready to provide even about 40 bcm natural gas per year for delivery to Europe (30 bcm from onshore and another 10 bcm from offshore deposits) for the project when all the technical details will be agreed and undersea pipeline will be constructed.105 Azerbaijan is ready to guarantee delivery of this gas to Europe through its existing and planned pipeline systems.106 The main export route for Turkmen gas from Turkish-Azerbaijani border to Europe will be the TANAP pipeline which is to be jointly built by Turkey and Azerbaijan and is expected to be com-missioned in 2018. Though the initial export capacity of the TANAP is planned to be about 16bcm/a, by adding few more compressor stations this volume can doubled in future.

Azerbaijan’s plans for inestment in oil infrastructure and refineriesin the Central Asia

Azerbaijan is one of the suppliers in the Central Asian refined oil products market and aims at strenghthening its positions in this field via investing in refinery business in the Central Asian countruies. Despite the richness in oil resources, local refinery capacity of the regional countries is not sufficient to meet the domestic demand for oil products and the Central Asia is expected to be dependent on imports for a quite an extensive period. Kazakhstan has three refineries on its territory; however they are all old and are not in a position to meet the quantity and quality demands of the current Kazakh economy. Modernization process of two of these three refineries continues and Kazakhstan is expected to fully meet local demand with own production only in 2016-2017. In 2012 Kazakhstan imported 1.3 mln tons of refined oil products from Russian which is val-ued as $1.33 bln.107 In Uzbekistan there are 3, in Turkmenistan there are 2 refineries. Tajikistan and Kyrgyzstan are almost entirely dependent on 105 Keith Weber (15 November 2012) Azerbaijan & Turkmenistan Disputes and The Tragedy of the

Commons,CSIS blog, at http://csis.org/blog/azerbaijan-turkmenistan-disputes-and-tragedy-commons (ac-cessed: May 18, 2013)

106 Jafar Aghadadashev (February 06, 2013) Turkmenistan Is Ready to Transport 30 bcm gas to the EU Countries –Minister (In Russian: Туркменистан готов транспортировать в страны ЕС 30 млрд. кубометров газа – Министр), 1news, at http://www.1news.az/economy/oil_n_gas/20130206024454845.html (accessed: 20 May 2013)

107 Rianovosti (January 30, 2013) Kazakhstan Seeks Russia Oil Product Import Cut, at http://en.ria.ru/business/20130130/179124175.html (accessed: May 10, 2013)


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foreign oil products supply, particularly on the imports from Russia. An-nual demand in oil products in Kyrgyzstan is about 1mln tons.108 In 2012 Tajikistan imported 350.000 tons of oil products from Russia.109

Currently Russia is the most important foreign supplies of refined oil to the region. China also continues the construction of a refinery in Kyrgyzstan, Kara-Balta with refining capacity of 850 thousand tons of crude oil per year.110 The construction of the refinery is expected to be completed in 2013 and will cost $250 mln for China. However, this refinery is mainly designed to be used for meeting demand for oil products in the Western China. Azerbaijan is examining potential for building refineries in Kyrgyzstan and Tajikistan to become an active actor in the Central Asian oil prod-ucts market. Local countries are also very interested in cooperation with Azerbaijan in this field to attract Azerbaijani investment to decrease dependence on Russia, as well as to insulate their market from fuel-price shocks, which have caused the countries serious problems in the past. Not surprisingly, the issue was discussed with Azerbaijani side by Kyrgyz and Tajik presidents during their visits to Baku in 2012. In January 2012, SOCAR delegation headed by the company’s president Rovnag Abdullayev visited Kyrgyzstan to discuss perspectives of the refinery in that country. Later, during the year negations continues at the experts level over the details of the deal. In January 2013, Zhumakadyr Akeneev, President of the Association of Oil Traders of Kyrgyzstan, stated that the place to build SOCAR oil refinery in Kyrgyzstan had been defined between the sides.111 The most important remaining issue which needs resolution is where the oil will be supplied to the refin-ery in Kyrgyzstan. Kyrgyzstan is land locked state and supply of oil can only be provided from Kazakhstan or through her territory from Russia. SOCAR expects assurances from the Kyrgyzstan government regarding to provide long-term oil supply to ensure the effectiveness of 108 Центральное диспетчерское управление топливно-энергетического комплекса, Нефтяная

промышленность Киргизии, at http://www.cdu.ru/articles/detail.php?ID=309594 (accessed: May 10, 2013)

109 Zarina Ergasheva (December 13, 2012) Tajikistan Cut Down Import of Oil Products ( In Russian: Таджикистан сократил импорт нефтепродуктов), at http://news.tj/ru/news/tadzhikistan-sokratil-import- nefteproduktov (accessed: May 10, 2013)

110 Central Asia Neswire (October 16, 2012) Chinese-financed refinery in Kyrgyzstan to open in 2013, at http://www.universalnewswires.com/centralasia/viewstory.aspx?id=13001 (accessed: 15 may 2013)

111 Trend (January 20, 2013) Place defined to build SOCAR oil refinery in Kyrgyzstan, at http://pda.trend.az/en/2110148.html (accessed: 12 May 2013)


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this project. Azerbaijani investments in the project could amount up to $250mln.112

From Azerbaijani perspectives, these kinds of refineries will result in SOCAR’s activation in the Central Asian market, as well as also en-able it to receive an access to neighboring Afghani and Chinese markets. Therefore, investing in building refineries in Tajikistan and Kyrgyzstan promises to be profitable business. Considering these project as part of SOCAR’s overall investment strategy in Turkey, Black Sea and other Eu-ropean countries, we can see that they are very important projects in terms of converting SOCAR from national to transnational oil company which will continue to bring considerable financial revenues to the country even when the amount of exported crude oil will decrease in the future.

Map 8-9: Europe-Asia ocean route and Trans-Siberian railway

Source: http://palytra.com/en/Trans-siberian- travel/travel_in_transsib_train_trans_siberian_routes_russia

112 Nefteno.ru (February 15, 2013) SOCARis Ready to Build a Refinery in the North of Kyrgyzstan in if Oil Supply Will Be Guaranteed (In Russian: SOCAR готов построить НПЗ насевере Кыргызстана при гарантиях обеспечения нефти), at http://www.nefteno.ru/news/2013/02/14/320440.aspx(accessed: May 17, 2013)


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Establishment of the South Caucasus�Central Asia transit corridor

The other regional priority of Azerbaijan in relations with the Central Asian region, is becoming a regional transportation hub and together with Central Asia to become an important transit route for trade between Asia and Europe through establishing the South Caucasus-Central Asia transportation corridor. Trade between the EU and China reached to $430 bln in 2011 and attracting part of this trade to pass the country will create significant revenue source for Azerbaijan. Currently this trade is realized through oceans and partly through the Trans-Siberia rail-way of Russia. Though ocean shipments is comparatively cheaper than rail or highways, it is calculated that direct railway passing through South Caucasus-Central Asia corridor will deliver goods from Europe to China and vice-versa much faster than the seaway transportation. According to the Bloomberg agency, it takes 40 days to deliver of a container ship from China to Europe while to carry a container from Europe to China via the Tran-Siberia railway takes about 20 days.113 It’s calculated that the same tripe from Europe to China will take about 15 days via the proposed the South Caucasus-Central Asia corridor. The total length of the corridor which starts in Korea and Chinese north-eastern provinces continues via Vladivostok, Khabarovsk and then with the Trans-Siberian railroad through Samara till the Brest is 10,800 km. Meanwhile, corridor starting from the same point in China, crossing Almaty, Tukmenbashi port, via Caspian Sea till Baku and then through Tbilisi till the Black Sea port Poti and further till the Ukrainian port Odessa or Bulgarian Varna is only 6,900 km.114

Moreover, certain goods, most notably, mechanical and electro-technical products such as laptops, LCD screens, auto parts, still products are not suitable for transportation via sea because of the high probability of dam-age in the sea conditions and these products constitute the important part of EU-China trade.115

113 Bloomberg BusinessesWeek (December 20, 2012) The New Silk Road, http://www.businessweek.com/articles/2012-12-20/the-new-silk-road (accessed: May 20, 2013)

114 Rovshan Ibrahimov (2008), European Union – South Caucasus Relations (In Turkish: Avrupa Birliyi- Güney Kafkasya Devletleri İlişkileri), PhD thesis, Ankara University, Ankara, p. 133.

115 Bao Chang (December 06, 2012) Trade across Central Asia boosted by railway landbridge to Europe, at http://www.chinadaily.com.cn/cndy/2012-12/06/content_15990626.htm (accessed: May 13, 2013)


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The first initiative to launch the South Caucasus-Central Asia trade cor-ridor was put forward in May 1993, at the Brussels conference between three South Caucasian and five Central Asian countries where the par-ticipants signed the EU backed TRACECA agreement to join their forces for effective linking Europe to Asia and improving transport

Map 10: TRACECA member countries and their major West-East transportation routes

Source: http://www.zerkalo.az/2012/aktivizirovat-gruzoperevozki-v-regionyi/traceca/

infrastructure. According to the project, regional countries consider-ably improved their highways planned to be used for East-West trans-portations. Since 2000, the cargo trade along the Azerbaijani Section of TRACECA has increased by 78%, with an average increase of 6% per year.116 In 2010, 51,7 mln tons of goods were transported along the East-West TRACECA route in Azerbaijan: 21,7 mln tons by roads, 20,6 mln tons by rail and 9,4mln tons by sea.117 Despite this significant 116 Taleh Ziyadov (June 2011) Azerbaijan as a Regional Hub in Central Eurasia, Strategic Assessment of Euro-

Asian Trade & Transportation, Azerbaijan Diplomatic Academy, p. 31, at https://www.wikileaks.org/gifiles/attach/37/37202_Azerbaijan%20as%20a%20Regional%20Hub%20in%20Central%20Eurasia_TZiyadov_new.pdf (accessed: June 15, 2013)

117 Ibid


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increase, it should be noted that, potential is much bigger than the men-tioned number. To fully realize the potential of the South Caucasus-Central Asia cor-ridor there is need for direct and accordingly more efficient railway sys-tem which will allow transporting larger volumes of goods in a relatively shorter period of time. In recent years, several important steps were made in this direction. In 2014 it is planned to open Baku-Tbilisi-Kars (BTK) railway to link the railway systems of Azerbaijan, Georgia and Turkey which means finalization of establishment of direct railways root be-tween Asia and Europe.

Map 11: Baku-Tbilisi-Kars railway

Source: http://www.molokane.org/places/Turkey/2010_National_Geographic/index.html

The project was one of the strategically important projects for Azerbaijan since previous railway linking Azerbaijan with Turkey remained closed due to the Armenia’s invasion of Nagorno-Karabakh province of Azerbai-jan. Aiming to become a regional transport hub, Azerbaijan was the key promoter of the project and in 2007 Baku allocated a $200 mln soft loan to Georgia for 25 years, with an interest rate of one percent, to finance the construction and rehabilitation of the Georgian section of the railway. An agreement to allocate additional $575 mln to the Georgian side, for a period of 25 years, at a rate of five percent, was signed in July 2011.118 Completion 118 Nigar Orujova (January 30, 2013) Progress in building regional railway’s Georgian section in focus,

Azernews, at http://www.azernews.az/business/49102.html (accessed: May 20 2013)


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of the project will establish the mentioned direct railway route between Europe and China passing the Caucasus and Central Asia and capable of

Map 12: Alyat sea port and logistics center

Source: http://www.traceca-org.org/en/investments/investment-projects/detail/?tx_trace-cainvprojectstable_pi3%5Buid%5D=26&cHash=df173520e08bebef3fb1eea82ea0350d

transporting large amounts of cargo and passengers. When concluded, BTK’s throughput capacity will peak at 17 mln tons of cargo and 1 mln passengers per year.119

In order to facilitate the smooth work the mentioned railways in the Cas-pian sea passage Azerbaijan, Turkmenistan and Kazakhstan have paid great attention to develop capacities of their Caspian ports. Turkmenistan recon-structed port in Turkmenbashi, while Kazakhstan and Azerbaijan builds new seaports in Aktau, Atyrau and Alyat. The developments of the seaports will only facilitate to increase trade relations not only with Kazakhstan and Turkmenistan but also with other countries in the region. 119 Nigar Orujova (October 24, 2012) Kazakhstan to transport goods via regional railway, Azernews, at http://

www.azernews.az/business/45001.html(accessed:may 20 2013)


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New major port of Azerbaijan in Alyat, south to Baku, is set to be opera-tional in 2015. The Alyat port will locate on a 400 hectares plot, of which 100 have been allocated to the Alyat International Logistics Center and fur-ther 50-100 ha for development of FEZ.120 Rail and road access to the coun-try’s transport network will be built, ferry, cargo and container terminals, different types of berths will be constructed in the port complex. Estimated cost of the port is $760 mln, though this number will likely rise.121

Map 13: Main East-West land transit corridors

Source:http://www.runawayjane.com/trans-siberian-plans/ (Routes of the Southern Caucasus-Central Asia Corridor and the Trans-Kazakhstan railways were depicted

by the authors)

When all three phases of construction will be completed, the annual opera-tional capacity of the port will reach to 25 mln tons of dry cargo and 1 mln TEU making it the largest non-oil cargo port on the coast of Caspian Sea.122

Kazakhstan has also completed the construction of two railway routes to Chinese border which established a direct railway link between Azer-baijan and China through Caspian Sea and Kazakhstan. However, along with Alashankao line passing through Kazakhstan, China wants to build 120 Ibid 119, p. 169, 121 Ibid 119, p. 170, 122 Ibid 119, p. 169


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a new railway to Central Asia–China-Kyrgyzstan-Uzbekistan which will be linked to Turkmenbashi and Baku through the existing routes. When completed, the railway line would go from Kashgar in Xinjiang, through Torugart and Kara-Suu in Kyrgyzstan, to Andijan in Uzbekistan, then across Afghanistan, Iran and as well as Caspian Sea, Azerbaijan and Tur-key as far as Europe. The cargo transit capacity of the line is planned to be approximately 15 mln tons; it is expected to cost $2 bln for China123 In a joint statement issued by Presidents Gurbanguly Berdimukhamedov and Islam Karimov during the Uzbek leader’s visit to Ashgabad on October 2012, Turkmenistan and Uzbekistan voiced their interest in Baku-Tbilisi-Kars railway project via implementing the Navoi-Turkmenbashi trans-port corridor project.124 Establishment of Navoi-Turkmenbashi route and connecting it Baku-Tbilisi-Kars (BTK) railway will further increase the effectiveness of railways links between Azerbaijan and Central Asia. It will allow Uzbek, Turkmen and Afghan goods to be exported to westward via the BTK, as well as through Georgian and Turkish ports. Uzbekistan will facili-tate to diversify export of cotton and other agricultural product to the world markets. At the same time, containers with goods for the Central Asian states and Afghanistan can be transported to the Western markets.125

Interest in joining South Caucasus-Central Asia transport corridor has also been shown by the participants of Viking railways project. Launched in 2003 by Latvia, Belorussia and Ukraine to connect Black Sea to Baltic via rail, Viking line carried 56,000 TEU in 2011.126 In 2011 Georgia and Moldova joined the project. In February 2013, Ukraine offered Azerbai-jan to join Viking railway project.127 Kazakhstan has also expressed the possibly of Kazakhstan’s joining to the project.128 Realization of connect-123 Roman Muzalevski (2012) China-Kyrgyzstan-Uzbekistan Railway Scheme: Fears, Hopes and

Prospects, Eurasia Daily Monitor Volume: 9 Issue: 102, Jamestown Foundation, at http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=39434 (accessed: January 30, 2013)

124 Nigar Orujova (October 24, 2012) Kazakhstan to transport goods via regional railway, Azernews, at http://www.azernews.az/business/45001.html (accessed:May 21 2013)125 Anvar Mamedov (December 01, 2012) Ride with the wind-Azerbaijan gained the status of a hub of a new

railway ferry route -Silk Wind (In Russian: Проехатьсясветерком- Азербайджан обретает статус узловогоцентрановогожелезнодорожно-паромного маршрута SilkWind), RegionPlus, No 123, pp. 57-59.

126 Baltic transport journal (January 01, 2012) Viking rail project on the offensive, at http://baltictransportjournal.com/overland-rail-road/viking-rail-project-on-the-offensive,415.html (accessed: May 22 2013)

127 News.Az (February 11, 2013) Azerbaijan may join railway project Viking, at http://www.steelguru.com/russian_news/Azerbaijan_may_join_railway_project_Viking/301315.html (accessed: May 21 2013)

128 NicklasNorling (February 11, 2011) Viking railroad connects Scandinavia with South Caucasus,


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ing Viking line to the South Caucasus-Central Asia corridor can establish effective links for flow of Central Asia goods to the Eastern Europe and Baltic ports via the territory of Azerbaijan. Realization of all of men-tioned transportation projects supported by Azerbaijan and cooperation with the Central Asian countries in this direction will bring about and ef-fective transit corridor between Europe and China and will considerably contribute to the development of both Azerbaijan and the whole Central Asian region.

Map 14: Viking railway

Source: http://www.railwayinsider.eu/wp/archives/45710

Central Asia, and China, Cacyanalyst, at http://www.cacianalyst.org/?q=node/5656/print (accessed: May 23, 2013)


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CONCLUSIONS AND RECOMMENDATIONSThe Central Asia is a region where almost all important global and regional players such as Russia, China, the U.S., Turkey, Iran and India have certain interests. However only three of them – Moscow, Beijing and Washington are the most important external actors whose interplay of activity is actually shaping the geopolitical picture of the region. Mos-cow continues to influence and define the course of many processes in Central Asia; many regional countries orient their foreign policy and to a certain degree economic relations towards Moscow. Russia possesses extensive list of leverages in the region that its competitors do not enjoy, it uses human and economic ties, migrants and minority factors, influence of Russian language, military bases, as well as multilateral institutional mechanisms in order to preserve its influence over the region. Through Russia is not the sole dominant of the Central Asia and is not likely to become so in the future, it is still the most powerful foreign actor in the region with the strongest means of influence. During the recent years we have also witnessed the activation of China in the Central Asia when Beijing started to apply the complex strategy towards the region combined of both political and economic means of in-fluence. Taking advantage of the difficulties encountered by the regional countries at the result of the world financial crises Chine intensified its penetration into the region and with allocating large amount of credits and investments to the regional countries strengthened its positions through-out the Central Asia. Currently, Chinese influence is gradually but steadi-ly rising in the Central Asia and it is considered the most powerful geo-political rival for Russia in the long-term perspective. Though the Central Asian countries welcome engagement with China as counterweight to Russia and the West, China is also persived as the greater long-term threat by the Central Asian countries. Until the start of war in Afghanistan, for the U.S., the Central Asia was just the “remotest” part of the post-Soviet space with no major impor-tance. Afghan war pushed the U.S. to deeper involvement and coopera-tion with the Central Asian republics and since 2001 until now, by Wash-ington, the Central Asia has been viewed through Afghani lens – for the U.S. policymakers the region has been first and foremost in Afghanistan’s


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neighborhood. Even now when the U.S. is about to downgrade its pres-ence in Afghanistan by pulling out combating forces, the U.S. projects involving the Central Asia still mostly linked to the future of Afghanistan. Particularly, the U.S. brand-new imitative of “New Silk Road” projects centers on this country and for deeper integration of Afghanistan to the outer World aims at making it a transit hub between Central and South Asia. The U.S. will definitely scale down its attention to the region after 2014, however it will try to keep foothold in the Central Asia both for is-sues related to Afghanistan and also for balancing Russia and China, as well as other regional powers. End of Soviet rule in the Central Asia also brought about new opportu-nities and challenges for regional powers, Turkey, Iran, and later India started to demonstrate interest in cultivating special relationship with re-gion. In the beginning Turkey attempted to use Turkish identity while Iran wanted to take advantage of religious revival process in order to influence the region. However both failed in achieving set goals and lat-er switched to more pragmatic and concrete project oriented relations with the Central Asia. Turkey has currently strengthened political and economic relations with the region, which by some, is viewed as a part of overall Eastward re-orientation of the Turkish foreign relations. Iran wants to intensify its relations with the Central Asia, however not so suc-cessfully, to ease its international isolation and puts main emphasis on regionalism, economic engagement and infrastructure development. The latecomer India, despite current weaker economic and political foothold in the region, also seems determined to develop relations with the Cen-tral Asia, particularly focusing on establishing infrastructure in order to eliminate the reach disadvantage to the region. Azerbaijan’s rising economic power and investment potential, as well as will for diversifying economy widens horizons of Azerbaijan’s foreign po-litical and economic activity and pushes it for activation in new neighbor-hoods. Azerbaijan is no longer just a Caucasus state; it faces a new chal-lenge for utilizing current development momentum to take the country to a new level of regional actress, to open up new regions far beyond the boundaries of the Caucasus for its economic activity. With its geographi-cal proximity, economic potential and historical/ethnic/cultural affinity, the


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Central Asia is perfectly positioned to become one of those regions.Along with cooperation in many other areas, Azerbaijan is particularly interests in two fields in the Central Asia– energy and transportation. The first field is transportation of energy towards the Western Markets. Cur-rently, the Baku-Tbilisi-Ceyhan oil pipeline is one of the important export routes for Turkmen oil and Kazakhstan also considers the resumption pumping its oil into pipeline in future. Azerbaijan-Turkey and EU also conducts negotiations with Turkmenistan which expressed its interest in joining the Southern gas corridor via Azerbaijan. Along with transporta-tion of the Central Asian hydro-carbon resources, Azerbaijan also consid-ers investing in oil refining infrastructure in the Central Asia. Despite the richness in oil resources, local refineries lack the capacity to supply the needed volumes of refined oil products in the region. Therefore, Azerbai-jan thinks about investing in building refineries in Tajikistan and Kyrgyz-stan which promises to be profitable business. The other regional priority of Azerbaijan is, together with the Central Asia, to become an important transit route for trade between Asia via establishing the South Caucasus-Central Asia trade corridor. The process was launched in 1993 with the signing of TRACECA agreement. Now, with the completion of the Baku-Tbilisi-Kars railway connecting Azer-baijan with Turkey, and Alyat seaport connecting Azerbaijan with the Central Asian ports, a competitive transit route will emerge in the region to transport the large amount goods in the East-West direction. To exploit the full potential of relations with the Central Asian countries Azerbaijan needs comprehensive and future oriented regional strategy towards the region. In order to achieve that,

First and foremost, the shortage of comprehensive research of a poten-tial of Azerbaijani-Central Asia relations and the Trans-Caspian co-operation should be addressed. Economic opportunities in the Central Asia for Azerbaijan, competitive advantages of the country with regard to the Central Asia, as well as the possible difficulties that can be en-countered in developing economic relation with the region should be thoroughly examined. Moreover, despite the common regional chal-


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lenges and opportunities, bearing in mind varying situations in various the Central Asian countries, exclusive strategies for cooperation and investment policy should be prepared for each of the 5 Central Asian countries.

It would also be very benefiting to further develop institutional framework for establishing regional schemes of cooperation and lift-ing the barriers before economic activities, particularly transnational transportation. Though improvement of infrastructure is taking place throughout the region, differences in transport legislation and loose coordination of the cooperation among the respective bodies of the regional countries is decreasing the effectiveness of regional trans-port corridor, causes unnecessary delays in cargo shipments. Approxi-mation and harmonization of legislation, better communication and coordination through the South Caucasus-Central Asia corridor will heighten the speed of transportation via this route which is the one of the most valuable advantages for transport corridors. Reducing fees for transportation services throughout the corridor and standardizing them to a maximum degree by all participant states can also make the route more attractive. Decrease of income at the result of reducing fees will be compensated in the future via increased volumes of transported goods.

Azerbaijan can benefit from further strengthening humanitarian ties using the existing shared ethnic, historical and cultural backgrounds as well as presence of Azerbaijani diaspora in the Central Asian coun-tries. Increasing attention to organizing cultural and sport events to-gether with the Central Asian countries can further contribute to the strengthening humanitarian-cultural ties. Developed humanitarian relations will facilitate the strengthening mutual understanding, eco-nomic and political relations

Opening direct flights to the capitals of the Central Asian countries and making the existing ones cheaper, can add value to both human and economic relations. Currently there are only few flights in a week to the Central Asian capitals from Baku which are quite expensive in comparison with the distance. The transit flights via Moscow, Kazan, Dubai or Istanbul is frequently used to travel to the Central Asia which


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further increases the travel costs between Azerbaijan and the Central Asian states.

Despite the visa-free travel agreements with the Central Asian states except Turkmenistan, limited duration period (3 to 4 days limitation) that Azerbaijani citizens are allowed to stay in the Central Asian coun-tries and vice-versa without registration in the migration office acts as another limitation before the mutual exchange of travelers. Mutu-ally extending this allowed duration period to stay in the country and simplifying registration procedures could also be beneficial in terms of fostering travels of businessmen, tourists, NGO representatives etc. between Azerbaijan and its Central Asian partners.

In the Central Asia, particularly in Kazakhstan there is demand for the fresh vegetables and other agricultural products which can be met by the Azerbaijani export. As Kazakhstan did by building a grain terminal on the Azerbaijani cost of the Caspian Sea, Azerbaijan can also study opportunities for marketing Azerbaijani vegetable there and facilitate the export by building cooling-storage capacity on the eastern coasts of the Caspian Sea.

Another filed of cooperation that could produce fruitful results is edu-cation. Along with the existing universities, recently a number of new and high-quality educational institutions such Azerbaijan Diplomatic Academy, Baku High Oil Academy etc. were founded in Baku which can offer quite attractive opportunities for the Central Asian students for post-graduate education. Baku is a beautiful city with rising fame in the region, which further strengthens the chances of the city to be-come a favorable destination for foreign students from the Central Asian countries.


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90. Zabikhulla Saipov(September 01, 2012) China’s Economic Strategies for Uzbeki-stan and Central Asia: Building Roads to Afghan Strategic Resources and Beyond, Eurasia Daily Monitor Volume: 9 Issue: 172, http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=39873

91. Zarina Ergasheva(December 13, 2012) Tajikistan Cut Down Import of Oil Products (In Russian: Таджикистан сократил импорт нефтепродуктов), http://news.tj/ru/news/tadzhikistan-sokratil-import-nefteproduktov


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Geopolitical Competition in the Central Asia, the Dynamics of Relations with Azerbaijan

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