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Kazakhstan: Economic Powerhouse

of Central Asia

                                                                R.G. Gidadhubli

Political and economic relations between India and Kazakhstan have all along been close and cordial. Yet as compared to Russia, China and the Western countries, India is not a major player in the Kazakh economy, notwithstanding the fact that India was one of the first countries which extended credit line of about $ 10 million as economic assistance soon after Kazakhstan became independent. Among the CAS, Kazakhstan is the largest trading partner of India and there are more than 30 Indian firms and joint ventures operating in various fields such as pharmaceuticals, chemicals, metallurgy, energy and so on. Some well known companies such as Lakshmi Mittal in metallurgical sector, Punj Lloyd have enhanced India’s image in that country. Even as India was late in entering the energy sector in Kazakhstan, consistent efforts by the ONGC-OVL getting strong political support by the Government of India have paid some dividends for the country. After the visit of Kazakh president to India in January 2009, India has succeeded in getting contract in the exploitation of energy field in Kazakhstan. While the lack of geographical contiguity is a disadvantage affecting the scope for India, efforts need to be made to get Kazakh oil and gas under swap deals via Iran.

 

India’s Economic Relations with Central Asia after the 2008 ‘Meltdown’: Perspective on Trends

                                                                                                               Hari Vasudevan

 

The economies of the Central Asian states have been affected by the “meltdown” in two phases.  First, there was a clear problem of foreign investment in Kazakhstan - the second leading investment and employment source in the region after Russia- from mid 2007 with ramifications for investment by the Kazakh banking sector in the Kyrgyz and Uzbek economies.  The trend may have been linked to the increasing problems of investment agencies in Europe and the US at this time.  But the overall impact was partly offset by continued sturdy performance in Russia, and reasonable support from sources there to the whole gamut of Central Asian economies, as well as continuity in employment opportunities all round. Undoubtedly, the worsening of the global investment climate during 2008 led to the deterioration of this state of affairs, since it affected foreign investment in Russia and Kazakhstan further as well as limited FDI in the other states of the region.

 

The impact of the “meltdown” was more acute following the fall in oil prices from mid 2008, leading to all round fall in investment and employment opportunities as the meltdown affected both Kazakhstan and Russia at these levels.  Although the official controls that are in force in Uzbekistan prevented the carryover of these problems directly into the Uzbek economy (and even had some positive effect since energy costs decreased), it has faced pressure and fall off of orders for textile products have created major problems as has the decline in remittances.  Kyrgyzstan was more firmly affected since there was a sudden depression in the construction industries and in employment outside the country.  The same is true of Tajikistan, with Turkmenistan being marginally affected in view of the less catastrophic fall in natural gas prices; gas being the primary revenue earner of this country. 

 

As the crisis has bitten deep, the sole state that has responded with aplomb to the recession has been Uzbekistan where a variety of policies has taken shape since 2008. 

 

Displacement Disarray in Central Asia

P. L. Dash

 

In the absence of refugee figures from other sources, particularly from the neighbouring countries of Central Asia, the Russian data could offer only a lopsided picture of the whole gamut of issues. Naturally, it would not reveal the extent and magnitude of immigrant-emigrant movements and nature of social, economic and political implications of the migration process. The issues are too intricate to be openly addressed. They continue to affect not only the economic life, but also the social fabric. We are aware that the break-up of the Soviet Union had resulted in family dislocations, leaving parents in one country, families of their grownup children in another, sons and daughter studying in a third country and grandparents living a fourth country. Wife worked in one country and the husband in another, precipitating a situation where one required visa to visit his own wife or mother.

 

 

Domino Effect of the Chinese Xinjiang

Mahesh Ranjan Debata

Xinjiang occupies an enviable geostrategic position at the crossroads of five cultural and geographic regions such as Russia, Central Asia, India, Pakistan, Tibet and China. These countries have been facing minority related problems, and almost all of them sans Tibet, have problems related to Islam. Xinjiang borders three Central Asian Republics - Kazakhstan, Kyrgyzstan and Tajikistan, as well as Russia, Mongolia, Afghanistan, Pakistan and India. In terms of geographical expanse, Xinjiang is the largest province of China with Uyghur Muslims being the majority.

An important factor that gave a fillip to the growth of radical Islam in Xinjiang was the Taliban coming to power in Afghanistan in 1996 and the presence of international terrorist organization Al Qaeda in that country. The radical Islamic forces got an instant breeding ground next door for thorough training in subversive and terrorist activities. Afghanistan turned out to be a paradise for the Uyghurs to safely carry out their Jihadi activities unabated. China blamed the extremist and fundamentalist groups in Afghanistan for fuelling Uyghur separatist activities.

Although external factors and actors did play an important role in bringing out and spreading radical Islam in Xinjiang, the internal factors too contributed significantly to the radicalization of Uyghurs. The most important reason for an upsurge in Islamic radicalism in Xinjiang in the 1990s was the growing hostility between Uyghurs on the one hand and the Hans on the other. Other factors like improved communication and transportation played a major role in strengthening the region-wide consciousness among Xinjiang’s Turkic people. Radio and Television broadcasts in the Uyghur language and improved telephone connections were other steps in this regard. Internet and mobile technology have given an added impetus to this which resulted in a kind of “cyber separatism.” These developments, leading to an unprecedented national consciousness, have given rise to a centripetal force different in kind and strength from any other phenomena that had existed in Xinjiang before.

India and Central Asia: From Hiatus to Hopes

Ranjana Mishra

Against this backdrop, the Central Asian countries continue to have some expectations that India would play a much larger role in the region and, albeit somewhat vaguely, consider India as a potential balancing factor to all other major players in the region. However, India's good relations with Russia and the fact that it is a relatively minor player in Central Asia restrict its role as an effective balancing force. India's major dilemma and constraints are how to access Central Asia. Given the situation in Afghanistan, and Pakistan's unwillingness to offer transit facilities to India, the traditional access route via Afghanistan is blocked for the foreseeable future. All possible routes to Central Asia via Iran are neither reliable nor optimal, even less so in view of the US and international pressures on Iran today. India could, however, explore the possibility of establishing links with Central Asia via China, since that is the only other overland route to Central Asia from India. This is however fraught with challenges since China is interested for greater trade and commerce with that region.

India has a distinct, geographic disadvantage in Central Asia compared to China. While China shares borders with Kazakhstan, Kyrgyzstan and Tajikistan, as well as Russia, India does not share a land border with any of the Central Asian states. However, the presence of two unfriendly regimes standing between India and Central Asia has slowed the progress of Indo-Central Asian cooperation in the economic, transportation and energy spheres. For example, progress on the $3.3 billion US-backed Trans-Afghan Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline to supply gas from the Daulatabad fields in southeast Turkmenistan has been delayed by instabilities in Afghanistan and poor Indo-Pak relations. With the ousting of the Taliban regime in Afghanistan, the installation of a pro-US regime and improving Indo-Pak relations, although the TAPI project was back on the table, the nagging instability in Afghanistan and Pakistan have further beclouded the prospects.

 

Central Asia: Water as an Apple of Discord

Anita Sengupta

 

                                             “In every drop of water there is a grain of gold.”

 

                                                                                          -  An Uzbek Proverb.

 

Conflict, or the possibility for conflict, therefore, is only one side of the hydropolitical coin. In a situation of growing water scarcity, transborder water resources also offer to the states sharing them an opportunity to co-operate with their neighbours in order to collectively reap the benefits that water in its multiple uses is capable of producing. Although states are generally inclined not to share with others what they consider their national resource, history shows that even states hostile to each other, overtly or covertly, co-operate insofar as common trans-border water resources are concerned. However, compromises, particularly where national interests have been at stake has not been easy and this is evident from efforts at sharing water and energy resources in the region. Also needs for irrigation often do not correspond to needs for maximum utilization for energy use. In summer when demands for irrigation are high, water is sought to be stored in the reservoirs for winter when demands for energy is at a maximum. This is reflective of a growing tension between upstream and downstream countries which are locked in relationships of mutual dependence. Kyrgyzstan and Tajikistan, the upstream countries, possess more water than they require for domestic use and consume more power than they can produce themselves. The downstream states, Kazakhstan, Uzbekistan and Turkmenistan, lack water but have abundant supplies of natural gas and oil. This should have ideally produced mutually beneficial arrangements but has actually given rise to discord.

 

Border Bickering in Central Asia

                                                                        Tabasum Firdous

New threats to state security had become a serious motivation in the process of constructing administrative barriers on the new Central Asian borderlines. In particular, the Taliban coming to power in Afghanistan at close proximity to the southern boundaries of the CIS in 1997, the deliberate atomization of the Islamic Movement in Uzbekistan, which committed raids throughout Kyrgyzstan and Uzbekistan, as well as the atomization of extremist organizations and drug trafficking via the region became widespread. It has become obvious that in conditions of transparent boundaries, and given that three of the five Central Asian states border Afghanistan, security concerns threatened rapid dissemination of armed conflicts throughout the region. One of the forms of responses has become the efforts of countries to put up frontier barriers, strengthen immigration control and allow movement thorough customs scrutiny and clearance of goods. This has forced the processes of delimitation and demarcation, sometimes unilaterally. Some countries in the region have also mined their borders. Mining the border is not a practicable solution. It has many unsettling effects; as such settling problems and conflicts of inter-state delimitation on the basis of mutual benefit and compromise is the right way to address the problem.

Central Asia on Precipice of Terror:

The AF- Pak Connect

Debidatta Aurobinda Mahapatra

 

The turmoil in Pakistan’s north-west region bordering Afghanistan had its flash point in 2001 when the US stepped up its ante in the wake of the 9/11 terror attack in New York and Washington. The US war pushed the Taliban towards south, i.e. Pakistan’s northwest. It can be mentioned here that Pakistan’s tribal areas lack strict government rule as law enforcement mechanisms have failed there, thus giving rise to emergence of radical organisations whose writ run large in the region. The convergence of Afghan Taliban and Pak Taliban became easier due to their predominantly ethnic Pashtun origin. The recent fighting in the Swat valley has caused concern in Central Asia as the defeated and rooted out Taliban might disperse to this region to further carry out their activities. Interestingly, the Swat deal of February 2009 which attempted to establish peace in the region was not only opposed by the radical Taliban but also by the Islamic Movement of Uzbekistan and United Tajik Opposition. According to N. Zamarayeva of the Institute of Oriental Studies, Moscow, foreign nationals of Arab and Central Asian origin made up almost 20% of the Taliban’s combative force. In fact, the Islamic Movement of Uzbekistan under Tahir Yuldashev had joined the armed units of Taliban and along with them had fought the NATO forces in 2001. Gradually, with the NATO onslaught, it had moved to the tribal areas of Pakistan and set up training centres to fight against the NATO and step up terrorist activities in Central Asia and the North Caucasus.

The Central Asian states’ proximity to Afghanistan and Pakistan has enhanced their vulnerability in getting embraced by the terror wave emanating from these regions. The porous borders, unsettled boundaries, however small in scale, the organised crime and drug trafficking further add to this apprehension. As the recent SCO summit pledged to counter the terror menace collectively, it remains to be seen how far this pledge would be translated into reality, keeping in view the complex politics of the region and the big power rivalry in the post-Soviet space.