Central Asia

This month, several former leaders of states that support Central Asia’s economic and political liberalization have weighed in on issues of globalization and economic integration.  In particular, former President of Turkey Mr. Demirel discussed the historic and continuing participation of Turkey in Central Asia’s economic development, noting that Turkey continues to build economic ties:

Turkish investments are in excess of 4 billion US Dollars and projects undertaken by Turkish contractors are currently valued in the range of $15 billion. There are some 1000 large and small sized Turkish firms operating in the region. Turkey’s trade volume with the region last year stood at $3 billion. The traditional multi-dimensional nature of Turkish foreign policy requires Turkey to be active on numerous fronts all at the same time.

These stats are in some contrast with perceptions that Turkey no longer has an economic influence — or has stopped collaborating in Central Asia’s economic growth.  What I particularly liked about this article, though, was the emphasis on collaboration in many areas–Mr. Demirel noted that the interest from the EU is primarily one of energy resources, leading to a one or two note policy in the region.  Likewise, his comments concerning terror and crime added to the list of items that large world powers, alone or in coalition, desire from Central Asia.

The second article from a former President, in this case an interview with Mr. Clinton from the U.S., featured a new global initiative that will concentrate in Asia–China and India, especially, but with the potential to radiate outward.  In this article, Mr. Clinton noted that developing states have the potential to “leapfrog” the process of industrialization, avoiding mistakes and bypassing wasteful processes.  For instance, states which have ahd to conserve energy because they have been unable to obtain enough of it have often developed solutions worth keeping or even marketing in terms of new energy awareness.  In future, if these states implement the best new technologies, they can bypass the ecological difficulties of the outdated ones. 

Both of these former Presidents emphasized the influence of Asian economic powers (China and India, specifically) as having a great role in creating global economic diversity and solutions for a growing middle class.  And in general, it is a middle class that makes democracy crucial.  Both of these presidents highlighted economic aspects as a precondition for democratic government.   This includes not just the entrance of major corporations, but the construction and care of new small and medium enterprises, which employ and raise more people to decision-making positions.   

There’s a great summary post at Global Voices that shows the many changes being implemented in the oil and gas industry; political appointments; and media ownership.  The effect of this much change in such a short time is to make Central Asia watchers paranoid, and with good reason: in general,  it takes time to assimilate the meanings of even the most transparent announcements. 

The oil price cycle
However, many of Kazakhstan’s personnel and policy changes are not terribly unpredictable economically.  For instance, when oil prices are high, almost every state will consider the advantages of expropriation.  This phenomenon is a feature of the oil price cycle since the 1970’s: in 1973, when much of the Persian Gulf expropriated oil; in 1979, during Iran’s revolution; and in the past few years, states in Latin America, this year, Russia, and now–possibly–Kazakhstan. 

Although all scenarios that consider power and political consolidation may be true,  such as the changes that include Mr. Kulibaev’s departure from Samruk, the state holding company and the problems at ENI are related to a current high price for production, and ENI’s inability to get the oil out of the ground.  Discussions of environmental or safety violations legitimize the state’s act of expropriation, but I’m pretty sure these act as legitimizers alone.  According to Dow Jones on August 31st:

The government of Kazakhstan expects compensation for what it sees as “tens of billions of dollars” of economic harm due to massive cost overruns and delays at the Kashagan oil project, led by Italy’s Eni SpA (E), a government official said Friday.

 According to RigZone, an oil industry news source, the Kashagan field was supposed to be developed in three phases.  The first phase included extensive research into the technical problems of the Kashagan field; the second, “rapid development” of production, and the third, production stabilization.  The same article describes many of the environmental fail-safes included for drilling.   The technical problems include large amounts of sulphur, poisonous gases, and an offshore situation where water is so shallow that it freezes in the winter and makes safety and cleanliness more difficult. 

Reading between the lines of an April 2007 article on the project, it appears that the first phase is now completed–because Kvaerner & ERSAI are now building (r just finished) support structures for a new phase of development.  In this case, with plans already made available and public to Kazakhstan, most of the brain work is done.  The project is now more vulnerable to takeover because this is the kind of work that independent oil companies do so well.  Now that state-of-the-art procedures have been deduced, drawn-up, and put into a production schedule, it becomes an art of implementation, (which a firm such as Russia’s Lukoil , which was mentioned at Global Voices Online) or any set of different oil companies could involve themselves.  Kazakhstan could expropriate the entire field, retain the technical specs and solutions, and then ask for re-bidding on the field.  It’s not a pretty picture. 

But while most people are looking at Russia’s oil companies as the spur for expropriation, this may be a mistake.  China’s CNPC purchased PetroKazakhstan, a Canadian company, for 4.18 million after Kazakhstan insisted that all buyouts of oil consortiums within their territory be approved by their government.  ONGC (India), which had been considering a buyout, bowed out and CNPC came forward to invest.

So remember economics . . .
With so many customers available, and oil prices so high, it is perhaps to be expected that Kazakhstan would want to change the manner of its oil deals.  ENI and the rest of the Kashagan consortium has been in a vulnerable position due to the lateness of production and the step of production that they have completed, which comprises most of its competitive edge.  The question then becomes: what does Kazakhstan hope to gain?  The first answer is income.  But there are other items: OSCE leadership; continued interest from other states even as all the oil has been bespoken and lease arrangements made; a more varied economy; a better monetary policy.  On a purely domestic level, Kazakhstan may well be trying to change in the coalitions of power within the state–perhaps to further consolidate Mr. Nazarbaev’s power or perhaps to change what powers other coalitions have for other reasons.  In the end, however, I believe that economics and production are  

Well, first I want to apologize to everyone for not posting more regularly–it’s been a little difficult to obtain a good internet signal so far.  However, I think I have the problem solved–for now.  It seems time to talk about what travel has taught me so far in respect to international relations. 

I am travelling in  Costa Rica.  Though Costa Rica has little to do with Central Asia, some general comments might be applicable for Central Asia watchers.  In particular, those of us in developed countries struggle to understand the other side of issues and arguments in the international arena.  I am hoping this post will be a springboard to new avenues of thought.  I also hope that those readers from other states will bring comments to this post that will illustrate problems of dialogue in international relations: those parts of issues that are so difficult to get across most of the time.

1. Different states have different items of importance:
Currently, the news in the United States concentrates mostly upon issues occurring in the region of the Persian Gulf, with other major issues of importance to the United States not under constant attention.  In Costa Rica, the current interest is in a referendum election for free trade–what we call CAFTA in the USA, and they call TLC–or Tratado Libros Commercios (Treaty for Free Trade).  Because we don’t get much news from Costa Rica, it doesn’t follow that Costa Ricans suffer the same problem: there’s a lot of media here concerning the issue of free trade–and not all of it is favorable to the CAFTA arrangement.  However, there’s not a lot available in most U.S. newspapers–and what is available only follows a very simple frame of reference.

Likewise, Costa Rica isn’t carrying a ton of information on Iraq, either. 

2. What seems unfavorable to one does not give benefits to others:
Considering CAFTA again as an example: many people in the U.S. are in favor of free trade.  However, other sectors of the U.S. are worried about a job drain from the U.S. to Costa Rica.  Just because something looks bad for the U.S. (lost jobs) it does not follow that it looks good to Costa Rica (lost small business).  Frequently, we find careless writing on issues of most concern. Thus we may be led to believe that if it hurts one country, another country gains in equal amount: but not so.  Each country, particularly in democracies, chooses among a catalogue of interests far more complex than a competition for a single prize.

3. Standardization versus exceptionalism:
Globalization generally refers to practices and procedures that more and more people follow all over the world–standard practices.  In many cases, standardization is useful to world trade.  For instance, being able to get interchangeable fasteners for machines, a unified symbolic system for air traffic control, and other procedures increases safety and convenience.  HOwever, globalization of an economy does not really imply a total standardization.  In competition, differences are known as competitive advantages or disadvantages.  Every difference has the potential to be either, and states need to look at each of their differences as a potential source of advantage as well as disadvantage.  For instance: we are used to considering only ease of transport or labor cost as competitive advantages in the world economy.  But aren’t there others? A different agricultural product or a different solution to a social problem: both of these have the potential to bring advantage and commerce to and from a particular country.

Culture creates solutions
With this in mind, I have been walking around now in a foreign country (excuse me, I mean that I have been a foreigner walking around in another country)  seeing the solutions that this culture, strange to me, has taken in regard to problems with which every society must contend.  These include: how to educate the young; how to procure energy resources; how to care for the aged; how to allocate costs and benefits; how to confer prestige or administer justice; how to make sure that information is spread; even those thankless tasks such as how to manage trash collection.   One enormous example for the world today of a local/regional solution that has turned into a world market is Brazil’s development of biofuels. 

Conclusion:
So what’s the point of these observations?  Mostly, this “walking around” underscored (for me at least) that there is nearly always another side to any question in international relations.  But the other side, and the compromises that must be made in order to solve the most intractable issues, require a little research.  Those of us who really want to understand issue positions more fairly do have options.  First, we can read more than what is provided for us by our own political parties and favorite thinkers.  We can move onward to other thinkers within our own culture.  Second, we can try to read more of what is available from the states in question: (for instance, some are in the Central Asian Newsroom).  And we can ask, or we can visit, the states in which we have the most interest.  In five days of walking and talking I’ve learned more about issues of free trade than I have in a good long time.   

You can bet I’ll be studying that Russian and reading more local Central Asian news from this day forward.  And then someday soon, that visa to each and every Central Asian state that will have me.  I can hardly wait.

. . . . is water, although one wouldn’t think so by the amount of ink and electrons we spend on hydrocarbon disposition.

First, you have to have water to drink, wash, and grow crops; potable water is also required for reliable manufacture of pharmaceutical, cleaning, and other chemical products.  Agriculture employs most of the people in Central Asia and represents in all states a significant part of GDP.  In a region that is aird desert with some rivers, water regimes have always been paramount.  Yet, since 1991, the history of Central Asian water regimes has reinforced the waste of water and unfair dealings by downstream states, who gain the water, and yet rely upon the upstream states to build the infrastructure. 

Trouble in River City
Now that upstream states have investors for upstream projects, who want return for investment, there’s going to be trouble in Central Asia’s riverine regimes.  For one thing, over time and right now, there will be less water available for all functions for which it seems useful.  And as upstream states develop self-help, downstream states cannot rely on state dysfuntion to gain them unpaid benefits.

According to Itar-Tass on August 28, Tajikistan’s president Rakhmon has informed his citizens to prepare for a cold winter, because water levels have decreased this year and the energy hydropower is not forthcoming.  You can bet that if water does increase in output, Tajikistan will be diverting quite a bit of it for power generation in order to increase its ability to develop a viable economy.  Of course, then it does go downstream to Uzbekistan like before, but once all this hydropower investment is made, the water courses are more manageable and can be controlled from upstream. 

In the absence of upstream water management, Uzbekistan sometimes had to contend with flooding, but in general the state did not have to take care of its relationship to Tajikistan in order to get water downstream.  Now Mr. Karimov is going to have to make nice:  well, it’s never too late to learn how, is it?

Specifically, Uzbekistan’s greater power in the we-provide-utilities-and-you-provide-water arrangement is going to change:  in the past, Mr. Karimov could turn the valves on a pipeline any time he wanted to protest a neighbor states’ behavior or policy.  For instance, after the Andijan Massacre in Uzbekistan, Kyrgyzstan held tight to international law and refused to expel Andijan refugees from their country.  Mr. Karimov took immediate revenge on Kygyzstan’s poor by cutting off lack fuel from Uzbekistan that winter. 

Now, the Kyrgyz republic pays for part of the energy it gets from Uzbekistan and barters water for the rest.   But as Kyrgyzstan and Tajikistan become energy independent, Mr. Karimov’s leverage dwindles.  Furthermore, as Tajikistan (and maybe even Kyrgyzstan) begins to export energy and manage water, the power not only equalizes but tips in the other direction.

If you don’t give, you don’t get:
Therefore, Mr. Karimov’s rather sulky statements during the SCO Summit about water control has some people speculating over future water spats, which could also include military actions (they certainly have done so in the past).  Mr. Karimov, according to Jamiyat at neweurasia.net, told the assembled heads of state that “you have all forgotten the Aral Sea”.

This is not an accurate statement, considering that Kazakhstan has invested in trying to bring the North Aral back to health.  On the other hand, Uzbekistan may not have forgotten but has certainly ignored the plight of the Aral Sea.  It may not have forgotten but has certainly ignored the numerous experts who have tried to achieve sustainable water regimes in the area.  In general, Uzbekistan has been one of the spoilers of every sustainable program–not alone, mind you–but consistently. 

Uzbekistan’s power as the regional center
With all of the dam improvements and hydropower installations going in upstream, the balance of power between Uzbekistan and Tajikistan is also undergoing a sea change.  In the past, all water cooperation regimes in Central Asia were like the ICWC, (Interstate Commission on Water Conservation), that is headquartered in Uzbekistan. 

When all of the Aral Sea Basin states were cooperating, at least nominally, then Uzbekistan’s central location made this a reasonable idea.  However,  as seems perennial in Uzbekistani relations, this position of power rarely resulted in acknowledgement of other stakeholders, and (as already noted)  nearly never to upstream stakeholders.  Since Tajikistan has been forced to take this problem into its own hands, Uzbekistan’s hard-line stance has not paved the way for future cooperation–that is, if there is enough water to be had.

The legitimizing factors
When it comes to diverting water, upstream states do have some power, but it is heavily curtailed by international law.  The UN Right to Water notes, and many court cases, have ruled on this issue: along riverine watersheds, all states have a legal stake in the disposition of the water.  Generally, the advantage goes to downstream states because they are usually more greatly populated and have more industry and agriculture (think deltas instead of mountains).  But it will be a very new question when there is not enough water to support life upstream in the mountains as well as down in the flatlands.

Again, Mr. Karimov has not kept the legal high ground.  Not only has water management been lax, but energy needs and exchanges for water between Uzbekistan and upstream states have always been used by Uzbekistan to punish upstream water providers.  Since Uzbekistan regularly cuts of fuel supplies in the winter, whether for non-payment of bills by its less-rich neighbors, it can hardly claim a humanitarian outlook on resource-sharing. 

If Tajikistan and Kyrgyzstan cannot depend upon energy supplies or water infrastructure cost-sharing from Uzbekistan or Turkmenistan, then they may well argue in international court that they are obliged to provide these commodities for themselves.  This strengthens all hydropower investment claims on their part and leaves Uzbekistan low and dry.

So, hey.  The shoe’s on the other foot.  Or, Mr. Karimov is waiting for the second shoe to drop.  Or, maybe, he is going to have to depend upon a mercy from those to whom he has not shown any.  Yeah, that last one: that’s the one.

But however just or fair this may sound, in the end it’s the people who suffer: all of them.  And these kind of disputes are just one harbinger of the new resource wars and disputes of the future: when in Central Asia, sub-Saharan Africa, and the American West, there is not enough water in all the places that need it.  It’s water: it’s more important than any other resource on earth to sustain life and build economies.  It just doesn’t get as much ink or as many electrons. . . for now.

Hello, faithful readers of Casual Friday, the Afghanistan Aggregator, and the Central Asia Beat.  They will all be here, only not today: Saturday or Sunday.  It takes awhile to put them together–and I am finding my way to San Jose and a course of language instruction beginning Monday.  Hasta domingo, you guys.

Have a great Weekend.  To be sure I will.

B.

Two news articles on increased HIV in Central Asia this week: first, in Tajikistan,  IWPR writes that HIV treatment and incidence is not well known by medical practitioners in Central Asia.  HIV treatment was made available for the first time ever in Tajikistan last year.  In the meantime, many patients have already died from the ravages of the disease.   

Today, RFE/RL reports from Kyrgyzstan that another nine cases of HIV transmitted by medical professionals to patients has been discovered, bringing the total up to 22 patients.  Seventeen of these are children, and at least ten of them are under two years old.  The news articles are about higher incidence of HIV infection, much of it transmitted from medical professionals to patients.  

To this we can add the cases in Kazakhstan in the Shymkent area, where approximately 132 children and 16 adults have been infected with the deadly virus and several have already died.

And perhaps the most fearful and disastrous, we don’t have much news from Turkmenistan and Uzbekistan to go on about incidence of the disease inside these states. 

The challenge of public health:
First of all,  these cases echo similar events in Europe and the U.S. twenty years ago before principles of medical practice changed in these “first-world” countries.  And there were many barriers to fixing the structure of medical practice and getting the information out to the public.  The challenge of public health through the ages has always been to find the sources and vectors of a disease and then get that information out; to challenge old structures of medical practice, from getting doctors to wash their hands (Semmelweis) to screening blood for HIV virus.  The larger challenge continues on the front of intangible goods: confronting the moral hesitance of society at large to deal with societal issues that are unspoken or less-spoken, and calming the panic that surrounds epidemics without inducing lethargy.

Returning to Central Asia:
So this is also the challenge for Central Asia, with HIV.  And there is no aspect of this fight that cannot be identified with by people in other states, even those further along in their understanding and treatment of HIV/AIDS:

1. Getting information to medical practitioners about how they do or do not get the disease.
2. Getting absolute medical rituals in place, such as clean/unused needles and surgical equipment, the use of gloves and glasses when working with the possibility of blood.
3.  Funding the practice of these rituals through a. education and b. supplying the tools needed to make those rituals occur.  This requires less corruption and more transparency. 
4. Inspecting clinics and testing clinicians for adequate equipment and evidence of its use 100% of the time.
5. Getting the word out to the public on the importance of these medical rituals, and safe and unsafe practices in their own lives.
6. Getting word out to the public on how the disease spreads, so that people do not shun HIV+ persons but are careful in specific situations, i.e., injuries, medical settings, and other exchanges. 

All of these challenges are made more difficult by a lack of infrastructure in these states, particularly in outlying areas; by the ingrained acceptance of authority by the people (hard to argue with a doctor, isn’t it?) and by a lack of free press.

We need to work on this one.  We need to work on this one awfully soon.

Talk to us:
I hope those out there fighting the good fight will share their knowledge with us and the help that they need.  Anything you leave in comments I will research, expand upon, and post anew.  I promise you.

Further Reading on Global Public Health:
RFE/RL: WHO warns about global epidemics
RFE/RL: Tatarstan HIV clinic on the vanguard
May 2006, interview with the head of UNAIDS on CIS countries
FPA Central Asia on Medical/Institutional Failure & HIV
Great Reading on Public Health: anything by Laurie Garrett.  The Coming Plague is a great start on understanding many contemporary public health issues. 
Here are two articles by Ms. Garrett:
The Challenge of Global (Public) Health (on giving health care providers the ability to work no matter what disease comes forward)
The Next Pandemic? (on H5N1 virus)
About HIV in the “First World”: The Band Played On by Randy Shilts.  There is a review of the work at Wikipedia.

Those “open and constructive” meetings between Kazakhstan and the Kashagan consortium led by ENI are proceeding apace.  The newest salvo in the negotiations is that Kazakhstan is asking for USD 10 billion in damages for non-performance of contract obligations.

Later in the article, one oil analyst dismissed Kashagan’s importance.  This has to do, I’m sure, with contract negotiating, but also with the reduced yield expected from the field–initially estimated at 45 billion barrels of oil equivalent and now down to 10 or 13 boe recoverable assets.

More updates soon, I’m sure.  For background, check last week’s comprehensive post.

Photo: Tsar’s Cannon from z.about.com