7.09.2009

Blood and oil in the Orient: looking at the state of play in Central Asia today, pt 1

Baku

With President Obama wrapping up a not-quite Napoleonic visit to Moscow, the moment seems right to take a long look into the shifting balance in Central Asia, and how American power stands there vis-a-vis Russia and China, the two other major players in the newest iteration of the Great Game.

The game is mixed for America right now, the players in flux as economic and political influence shifts. The shifts, though, are less than promising for American influence in the region.

The major reason for this is the economic downturn. The dollar's downturn has had nasty impacts in Central Asia, and right-wing conspiracy theories about the emerging Amero have fed into anti-American feelings and bred fear. The push by Russia and China to overthrow the dollar as the central currency of world trade is unwittingly bolstered by the likes of Lou Dobbs; currency fears are bolstering Russian and Chinese positions in Kazakhstan, a comparably Western-looking nation (if only comparably):
People still recount how fortunes were made and lost in that currency transition, and everybody wants to be on the winning side if it happens again. Secondly, the people of Kazakhstan and much of the world outside the US, always feel understandably vulnerable in their dependence on American currency. Finally, there is another important thing to mention – Russian television has jumped on the bandwagon, albeit with different motivations than those of Hal Turner and Lou Dobbs.

Analysts say that the likelihood of Russo-Chinese cooperation beyond some joint military excercises is low, but the current currency push may change that; it's not terribly likely, but it is something the Obama administration must keep an eye on as domestic stimulus efforts stagger on.

Then there's the oil game, perhaps the most volatile arena. After effectively losing control of major energy fields after the collapse of the Soviet Union, Russia has been trying to get back control of its near abroad -- places which, psychologically, are still Russia to many Russians. The Georgia war must be read in the context of Russia flexing its muscles to remind the Caucasian countries of its strength: Russian forces are so much closer to the Baku-Tbilisi-Ceyhan pipeline, the main non-Russian transit point for Central Asian gas and oil to Europe. The move has had the intended effect: Azerbaijan has agreed to ship gas to Russia in a move the Jamestown Foundation calls a wakeup call to Brussels and Washington.

Russian control of gas and oil flows to Europe has broader implications, giving it a stronger hand to meddle in Central Asian and Caucasian politics. What the Wall Street Journal calls "energy nationalism" makes Europe in many ways hostage to Russian interests; the EU becomes that much less able to respond strongly to Russian aggression as more of its oil and gas flows through Russia, and it is clear that "Russian leaders regard their energy assets as tools of foreign policy leverage and envisage a future in which resource competition may be resolved by military means."

On the other hand, the Nabucco pipeline appears to be moving ahead, creating another channel for hydrocarbons to flow to Europe through Turkey. This creates another benefit to the West, tying Turkey to Europe more closely. Building a Trans-Caspian pipeline would further bolster European energy security and create better ties with Central Asia.

As Russia continues to gather power vis-a-vis the EU, China is increasing its hand in the carbons markets of Central Asia. An Azerbaijani move to settle the issue of Caspian Sea borders may increase Kazakhstan's control of hydrocarbon reserves there; meanwhile, a new pipeline directs resources Eastward. Repressive Turkmenistan, is also building a pipeline to China. Doing deals with repressive and often corrupt regimes suits China, allowing it to move to control reserves politically out of reach of Western companies.

A last note should concern jockeying over the Manas air base in Kyrgyzstan. While the Kyrgyz originally planned to evict the US from the base, which is crucial for air support in Afghanistan, that decision has been reversed in a move seen as a blow to Russian interests in the region. La Russophobe claims that this reflects a broader pattern of countries trying to "swindle Russia in the coolest way" -- and there are significant examples of a Russian loss of control in the wake of the economic downturn. Moreover, I wonder if the Manas decision hasn't pushed Russia into its decision to open airspace to US planes bound for Afghanistan. But this doesn't necessarily play to American advantage, and as always, LR needs to be taken with a grain of salt.

coming up, part two: nukes and naivete bombs and breakfasts