C. Asia's Great Game


Mar 5, 2007

This commentary originally appeared in United Press International on March 5, 2007.

Gurbanguly Berdymukhammedov is not exactly a household name around the world. But the recent election of the former deputy prime minister and health minister as president of Turkmenistan could have a profound influence on events far from the remote Central Asian nation.

Turkmenistan's presidential election, which was the first contested election in the former Soviet republic since it became an independent state, marks an important new stage in the emerging new Great Game in CENTRAL Asia. Officials in Moscow, Beijing, Washington and many European capitals will be watching closely to see what policies Berdymukhammedov will pursue.

Why is Berdymukhammedov's election attracting such attention? Because Turkmenistan has some of the largest natural gas reserves in the world. As a result, any change in its foreign and trade relations would have enormous implications for global energy security.

Turkmenistan's gas is critical to Russian President Vladimir Putin's energy strategy. Gazprom, the state-controlled Russian energy conglomerate, is increasingly dependent on Turkmen gas to meet its domestic energy and export needs. Turkmen gas will become even more important in the future as demand rises and Gazprom's domestic production struggles to keep pace.

At present, Russia controls all the pipelines through which Turkmen gas is exported. This has allowed Moscow to largely control the flow of Turkmen gas and bargain for lower prices for Turkmen gas than it charges for its own gas. But Western governments would like to see the construction of new export routes that bypass Russia and diversify supply lines.

Plans to build a Trans-Caspian Pipeline that would break Russia's monopoly on export routes were blocked by Turkmenistan's former President Saparmurad Niyazov, who died Dec. 21. However, Berdymukhammedov's election opens up new prospects for finally getting the project off the ground.

Niyazov himself slowly began to recognize the importance of breaking Russia's stranglehold. Shortly before his death, he was able to extract a 54 percent increase in what Moscow pays for Turkmen gas, bringing the price to $100 per thousand cubic meters — still well below what Russia charges Western Europe and its neighbors.

Niyazov also made overtures to China. During his visit to Beijing in April 2006, China signed a deal to buy 30 billion cu. m. of Turkmen gas annually for the next 30 years. In addition, the two countries signed a framework agreement to construct an export pipeline to China, which is expected to go through Kazakhstan and Uzbekistan.

China's entry into the Central Asian gas market could set the stage for growing competition between Russia and China in the region. In this competition, Russia has certain advantages. Central Asia was part of the Russian and Soviet empires. This has left a legacy of economic ties and interdependencies, especially in the energy field. The Central Asian elites are also highly Russified due to long years of Russian and Soviet rule.

After the collapse of the Soviet Union, Russian influence in Central Asia declined. However, President Putin has sought to exploit the fear Central Asian leaders have of Islamic extremism to strengthen Russia's military and security ties to the countries in the region. The recent rapprochement with Uzbekistan, which evicted the United States from its base in Karshi-Khanabad last summer, has been the most visible sign of this new forward strategy.

But China has recently begun to make important inroads in the region. Geographic proximity, security and economic interests have combined to make Central Asia an increasing priority for Beijing. In the past decade, China has established trade missions in all the Central Asian countries and invested heavily in infrastructure projects linking the Chinese mainland with Central Asia.

Beijing's growing energy needs have been an important driving force behind its new activism in Central Asia. In addition to the gas deal with Turkmenistan, China has shown an increasing interest in obtaining Central Asian oil. In 2005, the China National Petroleum Corp. purchased Petrokazakhstan, the largest oil company in Kazakhstan, for $4.18 billion and spent another $700 million on a pipeline that will carry the oil to the Chinese border.

China is also concerned about separatist pressures among the Uighur population in the Xinjiang Uighur Autonomous Region. The Muslim Uighur population in Xinjiang shares religious and cultural links with the Uighur population in neighboring Uzbekistan and Kyrgyzstan.

Fears that Uighur separatists might join forces with Islamic extremists have prompted China to increase border and intelligence cooperation with Uzbekistan and Kyrgyzstan in recent years. This is because stability on China's Western border is crucial for ensuring continued Chinese economic growth.

China and Russia both want to see the elimination of the U.S. military presence in Asia, which has led them to cooperate more closely lately. However, this cooperation represents a short-term marriage of convenience rather than a budding new strategic alliance. Over the long run, the two countries are likely to be rivals for influence in Central Asia.

How this rivalry evolves will increasingly shape Central Asia's future and the world energy market.

© 2007 United Press International

F. Stephen Larrabee holds the Corporate Chair in European Security at the Rand Corp., a nonprofit research organization.

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