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Natural Gas and the ‘Lesser’ Caspians: How New Players Might be Good for Everyone

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Energy: what was once a largely single-resource/two-state controlled industry has given way to other resources of significance. In turn, this has also given rise to other states as major players in the arena. Given the increased need for energy among states, there has been greater collaboration and cooperation among states with regards to energy resources.

This is well exemplified by the US’ early and continued energy relationship with Saudi Arabia following World War II. Saudi Arabia may have drastically different security and human rights priorities than the US, and yet they both have been longtime energy partners that rely on one another heavily. Relationships of this nature have grown in frequency since then and as a result the Caspian region has emerged as a major player in energy security geopolitics.

By and large oil has been, and for the most part still is, associated with energy security. So long as a nation has access to an amount of oil commensurate with its needs, it is energy secure. However, a new player in the energy resource arena has begun to emerge: natural gas. Though natural gas has been around forever, it has taken on a position of importance in the struggle for energy security only recently. Natural gas can be used for everything from heating, cooking, and electricity generation. In fact it has many of the same applications as oil. The Caspian region is starting to exploit this resource. The region is one of the oldest oil-producing areas in the world and, though it continues to play a significant role in oil production, the control of energy in the region has begun to shift largely as a result of natural gas. Oil production and export from the region has primarily gone through Russia (or the USSR) throughout history. Caspian states, however, have discovered that they are home to some of the largest natural gas reserves in the world and now are looking to bypass Russia entirely to export it to the European Union (EU). This is significant for two reasons: first, it would shrink Russia’s impact as a controller of energy resources worldwide, especially in the EU. Second, it would drastically raise Kazakhstan, Azerbaijan and Turkmenistan’s profiles over energy resources and security.

Russia’s historical dominance over the Caspian region gave it significant control over the global energy market. It is estimated that 17 percent of the world’s oil comes from the Caspian (primarily Iran and Russia) and it is largely responsible for providing the EU with energy security. The shift away from Russia by other Caspian states, however, erodes Russia’s stranglehold on energy resources in the region and gives way to exciting new players and geopolitics. Caspian states have already begun to break away from Russia in their bid to export natural gas to the EU. The process has been underway since the dissolution of the USSR, with concrete realization in the late 1990’s. But ultimately it was always hindered due to strong opposition, largely from Russia and Iran, which vehemently opposed the any independent Caspian projects from the other littorals. In the mid-2000s, once the Russia-Ukraine gas dispute began in earnest, the project began to gain more traction. There was a shift in allegiance between the littoral nations and renewed interest in the project sprang back to life. Since then, massive headway has continued to be made, largely to the dismay of Russia and Iran.

The Russia-Ukraine dispute can truly be seen as the point when the lesser Caspian littorals decided to separate themselves from Russia as far as energy resource export is concerned. This is not to say they have separated themselves completely, as there is still collaboration on energy resources in the area. However, the dispute has led to Russia and Iran being excluded from the southern gas corridor project, which is expected to become fully operational by 2020 and supply much of the EU with natural gas. This is a boon financially for the nations involved, but perhaps more importantly, it creates a major geopolitical shift for those lesser littorals in the Caspian. States such as Turkmenistan, Azerbaijan and Kazakhstan, who have historically had decidedly smaller stakes in the energy sector, stand to gain significant traction by building and remaining in control of this corridor without major Iranian or Russian influence/interference. This can only serve to strengthen their diplomatic ties with the EU while simultaneously weakening Russia’s and elevating their status as legitimate players in energy geopolitics. Russia and Iran have opposed the pipeline repeatedly, with Russia playing a far more active and vocal role in the opposition than Iran. Throughout the last decade and a half, Russia has thrown virtually every piece of oppositional ammunition at the construction of the pipeline. Its two primary tactics have been to oppose it environmentally and by way of old treaties.

The treaty option has been the strongest oppositional tool used. Specifically, Russia has been using the treaties signed by Iran and the Soviet Union in 1921 and 1940 to threaten the other Caspian states. They have pointed out that the treaties are still in effect and that without support for the pipeline from all littoral states, any construction in the Caspian Sea would be illegal. There is some disagreement over whether these treaties still hold any legal bearing today. Next, Russia leveraged the environment in an attempt to oppose the project. According to Russia’s Natural Resources Ministry, pipelines along the Caspian Sea floor would be environmentally unacceptable. Aside from the fact that anytime a pipeline is placed in a body of water it has some environmental risk, this was clearly an attempt by Russia to try and generate international opposition to the pipeline. This is of course somewhat ironic given Russia uses similar environmentally-concerning pipeline routes. Evidently none of these attempts have had much of an impact on the project overall as it is still well underway. There is no doubt that Russia and Iran spent such a considerable amount of time opposing the pipeline due to the fact they knew its construction set a bad precedent for their continued dominance in the local energy sector. If former Soviet states can break away from Russia economically, then perhaps they can break away in yet other ways in the future. The more these lesser littoral Caspian states strengthen diplomatic bonds with Western-leaning nations, the less reliant they are on Russia. The further Russia is from controlling larger amounts of energy, the weaker its position in terms of geopolitics, something it considers anathema to its international security profile and agenda.

Moving forward, the lesser Caspians will gain significant respect and authority in their development and control over future energy. This alters the geopolitical arena enough that other states around the globe need to take notice, though this awareness so far has been slow. It allows the Caspian, minus Russia and Iran, to be yet another option when it comes to building diplomatic ties and securing access to energy now and in the future. Despite the fact that the amount of natural gas they plan on moving may not radically alter the geopolitical arena overnight, there is opportunity to move enough in the future that could make a major impact. More importantly, this gives the EU a second option for energy procurement, which increases its energy security and also gives it the option to slowly cut ties with other ‘problematic’ providers like Russia. Perhaps the most interesting point of this entire development is Russia’s complete lack of desire to do anything but threaten verbally and act diplomatically. To date the nation has not taken any physical action to impede the pipeline and it has also continued to maintain trade and economic ties with the lesser Caspian nations it is protesting against. Despite having divergent views on the pipeline and actively attempting to impede it diplomatically, Russia seems unwilling to militarize the situation, something that deserves at least begrudging respect and acknowledgement. Perhaps this is a potential sign of building diplomacy over military solutions, which would be a global plus for the entire international community. If Iran and Russia realize they must recognize challenges to their energy dominance with only a need to work with other Caspian nations, even though they do not completely agree with them, then a critical future region of the globe has a chance to remain stable and at peace. In this case, maybe the entrance of new players into the arena doesn’t have to signal the start of a new bloodbath or new geopolitical tension.

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Central Asia

Kazakh court case tests Chinese power

Dr. James M. Dorsey

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A Kazakh court is set to put to the test China’s ability to impose its will and strongarm Muslim nations into remaining silent about its brutal crackdown on Turkic Muslims in the north-western province of Xinjiang.

The court will hear an appeal by a former worker in one of Xinjiang’s multiple re-education camps against the rejection of her request for asylum. The appeal illustrates the political quagmire faced by Central Asian nations and Turkey given their ethnic, cultural and linguistic ties to China’s estimated 11 million Turkic Muslims that include 1.5 million people of Kazakh descent.

It also highlights China’s risky bet on being able to leverage its economic power to ensure the Muslim world’s silence about what amounts to the most concerted effort in recent history to reshape Muslim religious practice.

Up to one million Turkic Muslims have, according to the United Nations, been detained in a network of re-education camps in which they are being forced to accept the superiority of Chinese Communist Party beliefs and the leadership of President Xi Jinping above the precepts of Islam.

Beyond the camps, Turkic Muslims in Xinjiang, a strategic minerals-rich province bordering on eight Central and South Asian nations that China has turned into a 21st century Orwellian surveillance state, are forced to refrain from religious practice and custom in public.

After denying the existing of the camps for the longest period of time, China last month felt obliged to acknowledge them and give them legal cover.

Authorities in Xinjiang amended their anti-extremism regulations “to allow local governments to set up institutions to provide people affected by extremist thoughts with vocational skills training and psychological counselling.” China asserts that the crackdown is intended to counter extremism, separatism and terrorism.

China’s acknowledgement was designed to counter the UN report, threats of US sanctions against officials and companies involved in the Xinjiang crackdown, and revelations by 41-year-old Sayragul Sauytbay, a Chinese national of Kazakh descent.

Ms. Sauytbay testified in an open Kazakh court that she had been employed in a Chinese re-education camp for Kazakhs only that had 2,500 inmates. She said she was aware of two more such camps reserved for Kazakhs.

Ms. Sauytbay was standing trial for entering Kazakhstan illegally after having been detained at China’s request.

She told the court that she had escaped to Kazakhstan after being advised by Chinese authorities that she would never be allowed to join her family because of her knowledge of the camps. Ms. Sauytbay was given a six-month suspended sentence and released from prison to join her recently naturalized husband and children.

Since then, Ms. Sauytbay’s application for asylum has been rejected and she has until the end of October to leave Kazakhstan. She hopes that an appeal court will reverse the rejection.

Ms. Sauytbay’s case puts the Kazakh government between a rock and a hard place and is but one of a string of recent cracks in the Muslim wall of silence.

Kazakh authorities have to balance a desire to kowtow to Chinese demands with a growing anti-Chinese sentiment that demands that the government stand up for its nationals as well as Chinese nationals of Kazakh descent.

Ms. Sauytbay’s revelations that ethnic Kazakhs were also targeted in the Chinese crackdown sparked angry denunciations in Kazakhstan’s parliament.

“There should be talks taking place with the Chinese delegates. Every delegation that goes there should be bringing this topic up… The key issue is that of the human rights of ethnic Kazakhs in any country of the world being respected,” said Kunaysh Sultanov, a member of parliament and former deputy prime minister and ambassador to China.

In a further crack, Malaysia this week released 11 Uyghurs who were detained after having escaped detention in Thailand.

The Uyghurs were allowed to leave the country for Turkey. The move, coming in the wake of a decision by Germany and Sweden to suspend deportations of Uyghurs to China, puts on the spot countries like Turkey and the United Arab Emirates, where Uyghurs risk extradition.

Malaysia’s release of the Uyghurs occurred days before Anwar Ibrahim took the first hurdle in becoming the country’s next prime minister by this weekend winning a parliamentary by election.

Mr. Ibrahim last month became the Muslim world’s most prominent politician to speak out about the crackdown in Xinjiang.

Earlier, Rais Hussin, a supreme council member of Malaysian prime minister Mahathir Mohamad’s Parti Pribumi Bersatu Malaysia (Bersatu) party and head of its Policy and Strategy Bureau, cautioned that “that geographical proximity cannot be taken advantage by China to ride roughshod over everything that Malaysia holds dear, such as Islam, democracy, freedom of worship and deep respect for every country’s sovereignty… On its mistreatment of Muslims in Xinjiang almost en masse, Malaysia must speak up, and defend the most basic human rights of all.”

Pakistan’s Religious Affairs and Interfaith Harmony minister, Noorul Haq Qadri, was forced to raise the issue of Turkic Muslims with Chinese ambassador Yao Xing under pressure from Pakistanis whose spouses and relatives had been detained in the Xinjiang crackdown.

Ms. Sauytbay’s appeal for asylum is likely to refocus public opinion in Kazakhstan and other Central Asian nations on the plight of their Turkic brethren.

She will not be deported, we will not allow it,” said Ms. Sauytbay’s lawyer, Abzal Kuspanov.

Mr. Kuspanov’s defense of Ms. Sauytbay is about far more than the fate of a former Chinese re-education camp employee. It will serve as a barometer of China’s ability to impose its will. If China succeeds, it will raise the question at what price. The answer to that is likely to only become apparent over time.

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Why the upcoming Congress of the Leaders of World is so vital for peace and prosperity

Kassym-Jomart Tokayev

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Religion has been, and remains, an immense spiritual force for good in our world. The shared values which underpin all world’s major faiths have positively moulded how we treat each other. Religious beliefs give direction, comfort and hope to billions of people.

Religious communities appear to have enormous potential for addressing today’s social problems. Faith groups across the globe are prominent in feeding the hungry, sheltering the homeless and caring for the vulnerable.  Our world would be poorer without the impact of religion on our lives.

Throughout history, religion has also been exploited to sow divisions. Instead of bringing people together and encouraging them to behaving decently toward each other, it has been abused to fuel suspicions and hatred, spread confusion about the true essence of religion. We are facing the problem of ignoring what religions have in common and exaggerating and distorting the difference between, and at times within, faiths.

The abuse of religion continues and is undermining hopes for peace and progress. In recent years, many thousands have died and millions more had to flee their homes in conflicts, in which religion has been used to justify discrimination and violence. Countering these dangerous distortions is one of the challenges that religious leaders should address.

There is no single answer. Yet at the heart of the solution is dialogue between religions to foster understanding and respect. This is an overarching aim of the Congress of the Leaders of World and Traditional Religions which is to be held for the sixth time in Kazakhstan’s capital Astana this month (October.)

The Congress was initiated by Kazakh President Nursultan Nazarbayev amid the growing religious tensions and extremism following the 9/11 terrorist attack in the United States. He believed it was critical that the opportunity be provided for religious leaders to work together to prevent religion being used to divide us.

His vision has struck a chord across the world. The Congress, which takes place every three years since 2003 has engaged prominent religious leaders and politicians from different countries around most pressing issues. By 2015, the number of delegations attending had increased from 23 to 80. High-profile attendees included then UN Secretary-General Ban Ki-moon, King Abdullah of Jordan and President of Finland Sauli Niinistö. Discussions centred on the role of religion in promoting development and measures to reduce appeal of violent extremism among young people.

The Sixth Congress, which takes place on October 10-11, will build on this efforts. Its focus is on how religious leaders can work together to play their full part in creating a secure world and prevent faith being abused to set people against each other.

Located at a crossroads of different civilizations, Kazakhstan has placed greater importance on promoting religious harmony and mutual respect. Our country’s history and geography have combined to create a society in which people of many different backgrounds and faiths live within single boundaries. Religious freedom has become a precious asset of our nation, which allows diverse beliefs to peacefully coexist and helps us to negotiate any concerns in a constructive spirit.

Such a mixture could have been, as it has been the case in other countries, a worrying source of tension and conflict. Despite negative expectations such diversity has been turned into a strength in our society where citizens are equally respected and are able to make their full contribution to the common welfare.

As a matter of fact, while Kazakhstan’s population may be largely Muslim, followers of all traditional faiths live in harmony with each other, are free to worship and enjoy equal rights guaranteed by the constitution. It is a source not only of national pride but has also been an indispensable platform for our stability and prosperity at home and growing influence abroad.

In this turbulent world, dialogue and mutual respect has never been more important. Nor has it been more critical to provide the forum where religious and political leaders can work together to prevent any distortion of faith for violent ends. The upcoming Congress is so vital for peace and prosperity.

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Central Asia

Reforms Can Accelerate Economic Diversification in Kazakhstan

MD Staff

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Kazakhstan’s future growth depends on reforms that provide a level playing field for the private sector and support economic diversification, according to a new Asian Development Bank (ADB) Country Diagnostic Study launched today.

The study, Kazakhstan: Accelerating Economic Diversification, identifies the most binding constraints to growth and provides in-depth analysis of structural reforms that will bring the country to its growth potential. The report finds that consistent and successful reform efforts can add an average of 1.2 percentage points per year to Kazakhstan’s gross domestic product.

“Kazakhstan needs to accelerate structural reforms to support the country’s economic diversification,” said ADB Country Director for Kazakhstan Mr. Giovanni Capannelli. “These reforms include improving the country’s business climate, enhancing competitiveness, and increasing private sector participation in the economy.”

Kazakhstan’s economy has transformed since its independence in 1991, mainly due to a surge in oil and gas exports. While the country achieved middle-income status in 2006, the downturn of oil and other commodity prices in 2014 exposed the country’s vulnerability to external shocks and constrained government revenues.

Future growth will depend on identifying sectors in which Kazakhstan has a strong growth potential, according to the study. These include food processing, basic metals, and chemicals. In agriculture, redirecting subsidies toward investment in infrastructure, improving access to finance, and promoting innovation can substantially boost productivity. Greater investment in infrastructure is essential to provide a link to unexploited markets, decrease transport costs, and support the production of tradable goods. Transit trade has a large growth potential, while increasing the efficiency of transport infrastructure can generate additional growth from other tradable sectors such as manufacturing, the report said.

ADB began supporting Kazakhstan in 1994 and has since approved over $5 billion in sovereign loans, nonsovereign loans, and guarantees. ADB operations in Kazakhstan are helping open up transport routes, foster private enterprise, address inequalities, promote inclusive growth, and deliver knowledge products and services. ADB also contributes to Kazakhstan’s participation in the Central Asia Regional Economic Cooperation (CAREC) program.

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