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#11 - JRL 7188
Economist Livshits Mulls Russia's Position in Central Asia
Rossiyskaya Gazeta
16 May 2003
"Realist's Comments" by Aleksandr Livshits:
"Neighbor Talks to Neighbor..."

When talk turns to Russia's position in Central Asia or the prospects for the development of its relations with the countries of the region, the media generally sink into profound pessimism.

They usually write things like the following: Russia has no economic positions in Central Asia, it has not even succeeded in articulating its interests or a regional strategy. During their years of independence the states have abruptly moved away from the Russian Federation and their elite is increasingly turning its attention to the West or, to be more precise, to the United States of America.

Inflated expectations have most likely taken their toll. People in Central Asia expected Russia to acts as an investor, a donor, and a guarantor of security. That did not happen since Russia was burdened with its own problems. Mainly economic problems. Mistakes were also made. In the early-nineties some members of the Russian leadership believed that it was necessary to dispose of Central Asia as soon as possible since it would supposedly retard the implementation of economic reform in Russia.

It is now too late to enter into polemics on this score. Suffice it to recall that independent experts describe Kazakhstan's banking system as the most progressive in the CIS, its market legislation is several years ahead of Russia's legislation, and Kyrgyzstan has already joined the World Trade Organization, while we are still tackling this issue.

Mutual interests are the basis for successful cooperation, and political will is also necessary. The decisions made by the Collective Security Treaty and Eurasian Economic Community summits, which took place in Dushanbe in late-April 2003, provide reason to raise the question of Russia's coincident or parallel interests with the Central Asian republics in the military-political and economic spheres.

The need to pool efforts is dictated by the numerous challenges to security which the CIS states are encountering. Among them the war on manifestations of terrorism, extremism, and drug trafficking (the latter issue was also the subject of keen discussion during the Eurasian Economic Community session) occupy a special place. While being a transit region for the threats emanating from neighboring countries, Central Asia is itself also the source of certain threats and security challenges. Poverty, a surplus dependent population, marginalization, and social discontent provide a spawning ground for these threats. Islamism has become the most popular ideology of sociopolitical protest.

The emergence of political Islam can be regarded as a long-term trend in Central Asian development brought about both by the region's civilizational features and the specific nature of its social transformation process. A major role is played by aid from international Islamic funds, which goes to the most radical Islamist organizations.

Suffice it to recall in this connection the actions of the gunmen of the Islamic Movement of Uzbekistan, who in 1999 and 2000 forced their way into Uzbekistani and Kyrgyzstani territory. According to experts, the activity of the underground Khizb ut-Takhrir [name as transliterated] party, which advocates the creation of a caliphate and rejects the possibility of cooperating with the secular authorities, could pose a serious danger.

The inclusion of Central Asian radical Islam in transnational criminal-terrorist networks has been observed along with its assimilation within international terrorist and drug business organizations.

These threats do not just affect Russia but extend to its territory, being interwoven with and helping to intensify Russian security challenges. The transparency of its borders, constant flows of migrants, and contacts that took shape back in the Soviet era have made Russia dependent on the development of the situation in the Central Asian states. There is an objective necessity to rebuff threats of this kind together.

The Collective Security Treaty member countries have set up a new organization -- the Collective Security Treaty Organization, which includes Russia, Kazakhstan, Belarus, Kyrgyzstan, Tajikistan, and Armenia. This happened at a time when the Collective Security Treaty had begun gradually to disintegrate -- Uzbekistan and Azerbaijan had withdrawn. A more internally integrated organization, a prototype for a military-political alliance, has replaced the dilapidated structure.

In the light of the military-political problems the question of the US military presence in Central Asia inevitably arises. This presence is not directed against Russia. Hence the creation of the Collective Security Treaty Organization cannot be regarded as some kind of belated, asymmetric response to the United States and at the same time to NATO as a whole. The point is that the US presence is not capable of curbing all the existing challenges. Thus, the problem of drugs production in Afghanistan does not overly occupy Washington, which believes that taking the drugs out of agricultural circulation (an exceptionally tricky and costly task) can only give rise to additional social tension in Afghanistan.

Ultimately these drugs do not go to the United States and, consequently, should not worry it. The flow of drugs from Afghanistan, only a negligible proportion of which is intercepted on the border, poses a particular danger to Russia. Contrary to previous notions, the population of the Central Asian states has begun to get increasingly involved in the consumption of drugs. What is more, although there are currently no overt appearances by the Islamist gunmen (they have lost their bases in Afghanistan), there is still a foundation for the appearance of new radical movements.

The situation in Afghanistan is by no means ideal either. The Taliban are stepping up their activity. But the attention of the United States is currently focused on Iraq. It can hardly be expected to take vigorous action in the Afghan area.

The Central Asian states' desire not to pit the US against the Russian presence is quite justified -- in the interests of the security they want to cooperate both with Russia within the Collective Security Treaty Organization framework and with the United States. Both powers have different potentials, which do, however, complement one another: The United States has powerful financial levers whereas Russia has a better knowledge of the situation in the region, it has developed ties not only at the level of the elite but also on a social level, and it has experience of curbing outside threats.

Mutual interests also form the basis for the economic cooperation between the Russian Federation and the states of Central Asia. These include debt rescheduling and asset acquisition, capital investment in power generation sectors, a coordinated policy in respect of international economic organizations, and the regulation of work force migration.

There were over 20 items on the agenda of the latest Eurasian Economic Community meeting (Russia, Kyrgyzstan, Belarus, Tajikistan, and Kazakhstan are the permanent members). To be specific, there was a detailed discussion in Dushanbe of questions of developing the community's external borders, customs cooperation, antidumping tariff issues, and collaboration on admission to the WTO.

The summit in Dushanbe was only a phase on the way to resolving many urgent issues. The Eurasian Economic Community framework has been extended. Armenia has won observer status, which Moldova and Ukraine already have. A year ago participants in the Eurasian Economic Community set themselves the major task of forming a single energy area, a single transport area, a gas alliance, and a single securities stock market.

Regrettably, work in these areas right now is proceeding slowly but the economic interest is undeniable. Everyone stands to gain from the reduction in the electricity tariff if the unified hydroelectric power system project is put into practice. Nor is any comment needed as regards the economic appeal of the Brest-Dushanbe highway project. The Kazakhstani president, who chairs the Interstate Council, said that the sides have made appreciable progress on the question of forming a free trade zone on the territory of the Eurasian Economic Community member states. According to Russian President Vladimir Putin, in the course of the session "a number of decisions were adopted which open up the prospect of multifaceted cooperation."

I should point out that Kazakhstan has for many years been consistently pursuing a particularly vigorous policy of expanding economic collaboration. President Nazarbayev initiated the formation of a Kazakhstan-Russia free trade zone and he is proposing to introduce a common unit of currency for the two states. In February 2003 Kazakhstan in conjunction with Russia, Belarus, and Ukraine announced its intention of forming a single economic area and a supranational body -- the Commission for Trade and Tariffs.

Integration issues have now begun to seem far more realistic than they did a few years ago. Needless to say, I am talking about the kind of integration that is not regarded as a threat to national sovereignty but strengthens that sovereignty by ensuring faster economic growth. According to G. Marchenko, chairman of the National Bank of Kazakhstan, integration could result in 2-3 percent additional growth in GDP. For Russia it would be 2 percent because Russia is a large country, for Kazakhstan 3 percent, and for small countries like Armenia or Kyrgyzstan, it could even be 4 percent. It is better to spend the money on investing in our countries' economies than in building equipped borders.

Regrettably, there have been plenty of examples in the CIS of economic associations with varying configurations being set up in the nineties. Many of them, designed to produce a propaganda effect, only compromised the idea of integration. The movement of flows of finance does not put up with trivialities. Investments are not organized amid victorious fanfares -- they merely mark the start of the underlying tectonic change that is capable of bringing about a new economic situation in the future.

The current level of multilateral cooperation, in which Russia and the Central Asian states are involved does not as yet provide grounds for unrestrained optimism: Bureaucratic barriers are being removed with difficulty and centrifugal tendencies are persisting. But one should not be a pessimist either -- then there would be no point in undertaking the resolution of tricky tasks. But it is necessary to remain a realist so as not to exaggerate and not to minimize either the difficulties or the achievements.

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