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.
Shifting Sands: Chinese encroachment in Central Asia and challenges to US supremacy in the Gulf
China and Russia are as much allies as they are rivals.
A joint Tajik-Chinese military exercise in a Tajik region bordering on China’s troubled north-western region of Xinjiang suggests that increased Chinese-Russian military cooperation has not eroded gradually mounting rivalry in Central Asia, long viewed by Moscow as its backyard.
The exercise, the second in three years, coupled with the building by China of border guard posts and a training centre as well as the creation of a Chinese security facility along the 1,300 kilometre long Tajik Afghan Border, Chinese dominance of the Tajik economy, and the hand over of Tajik territory almost two decades ago, challenges Russian-Chinese arrangements in the region.
The informal arrangement involved a division of labour under which China would expand economically in Central Asia while Russia would guarantee the region’s security.
The exercise comes days after China and Russia operated their first joint air patrol and months after Tajik and Russian forces exercised jointly.
The “exercise represents a next step in China’s overall encroachment upon Russia’s self-proclaimed ‘sphere of influence’ in Central Asia,” said Russia expert Stephen Blank.
“Moscow has given remarkably little consideration to the possibility that China will build on its soft power in Central Asia to establish security relationships or even bases and thus accelerate the decline of Russian influence there,” added Eurasia scholar Paul Goble.
The perceived encroachment is but the latest sign that Russia is seeking to balance its determination to ally itself with China in trying to limit US power with the fact the Chinese and Russian interests may be diverging.
The limitations of Russian Chinese cooperation have long been evident.
China, for example, has refrained from recognizing Russian-inspired declarations of independence in 2008 of two regions of Georgia, Abkhazia and South Ossetia that recently sparked anti-government protests in Tbilisi.
China similarly abstained in a 2014 United Nations Security Council vote on a resolution that condemned Russia’s annexation of Crimea.
Meanwhile, Chinese dependence on Russian military technology is diminishing, potentially threatening a key Russian export market. China in 2017 rolled out its fifth generation Chengdu J-20 fighter that is believed to be technologically superior to Russia SU-57E.
Perhaps most fundamentally, Chinese president Xi Jinping opted in 2013 to unveil his Belt and Road initiative in the Kazakh capital of Astana rather than Moscow.
By doing so and by so far refusing to invest in railroads and roads that would turn Russia into a transportation hub, Mr. Xi effectively relegated Russia to the status of second fiddle, at least as far as the Belt and Road’s core transportation infrastructure pillar is concerned.
China’s recently published latest defense white paper nonetheless praised the continued development of a “high level” military relationship with Russia that is “enriching the China-Russia comprehensive strategic partnership of coordination for a new era and playing a significant role in maintaining global strategic stability.”
In a bid to ensure Russia remains a key player on the international stage and exploit mounting tension in the Gulf, Russian deputy foreign minister and special representative to the Middle East and Africa Mikhail Bogdanov this week proposed a collective security concept that would replace the Gulf’s US defense umbrella and position Russia as a power broker alongside the United States.
The concept would entail creation of a “counter-terrorism coalition (of) all stakeholders” that would be the motor for resolution of conflicts across the region and promote mutual security guarantees. It would involve the removal of the “permanent deployment of troops of extra-regional states in the territories of states of the Gulf,” a reference to US, British and French forces and bases.
Mr. Bogdanov’s proposal called for a “universal and comprehensive” security system that would take into account “the interests of all regional and other parties involved, in all spheres of security, including its military, economic and energy dimensions” and ensure the provision of humanitarian assistance.
The coalition to include the Gulf states, Russia, China, the US, the European Union and India as well as other stakeholders, a likely reference to Iran, would be launched at an international conference on security and cooperation in the Gulf.
It was not clear how feuding Gulf states like Qatar, Saudi Arabia, the United Arb Emirates and Iran would be persuaded to sit at one table. The proposal suggested that Russia’s advantage was that it maintained good relations with all parties.
“Russia’s contributions to the fight against Islamic terrorist networks and the liberation of parts of Syria and Iraq can be regarded as a kind of test for the role of sheriff in a Greater Eurasia” that would include the Middle East, said political scientist Dmitry Yefremenko.
Mr. Putin this week asserted himself as sheriff by signalling his support for embattled former Kyrgyz president Almazbek Atambayev, a Putin crony who has been charged with corruption. Following a meeting in Moscow, Mr. Putin urged Mr Atembayev’s nemesis. president Sooronbai Jeenbekov, not to press charges.
At the same time, Mr. Putin, building on his visit to Kyrgyzstan in March, offered Mr. Jeenbekov a carrot.
Kyrgyzstan “needs political stability. Everybody needs to unite around the current president and to help him develop the state. We have many plans for cooperation with Kyrgyzstan and we are absolutely determined to work together with the current leadership to fulfill these plans,” Mr. Putin said.
Russia and Kyrgyzstan signed an agreement during the visit to expand by 60 hectares the Kant Air Base 20 kilometres east of the capital Bishkek that is used by the Russian Air Force and increase the rent Russia pays.
Mr. Putin further lavished his Kyrgyz hosts with US$6 billion in deals ranging from power, mineral resources and hydrocarbons to industry and agriculture.
Mr. Putin also allocated US$200 million for the upgrading of customs infrastructure and border equipment to put an end to the back-up of dozens of trucks on the Kazakh-Kyrgyz border because Kyrgyzstan has so far been unable to comply with the technical requirements of the Russia-led Eurasian Economic Union (EEU).
Uzbek president Shavkat Mirziyaev last month gave the EEU, that groups Russia, Kazakhstan, Kyrgyzstan Belarus, and Armenia, a boost by declaring that Uzbekistan would need to join the trade bloc to ensure access to its export markets.
EEU members account for 70 percent of Uzbek exports.
Said Russia and Eurasia scholar Paul Stronski: “China’s deft diplomacy towards Russia — along with both states’ desires to keep the West out of their common backyard — has kept tensions behind closed doors. But with China now recognising it may need to strengthen its security posture in the region, it is unclear how long this stability will last.”
Chimes from Tashkent
Located at the new center of global attraction for economic activity, Pakistan and Uzbekistan share a long string of relations. After the independence from the soviets, Pakistan was among the first countries to recognize it. In 1992, Pakistan established their first diplomatic sanctuary in Tashkent. Since then delegations from both the countries paid visits to each other.
The bond shared between the two countries, that lie in close proximity, is strengthened by similar eastern culture and fortified by the religious ties. This sharing of cultural and religious values is clearly visible in the national language of Pakistan which borrows thousands of words from Uzbekistani language. This nexus is now getting even stronger with the increase in co-operations in social and economic sectors.
Relations between both the states saw an unprecedented growth in recent times and this social integration is ever growing. During the last year only,
63events such as seminars, presentations and business forums were arranged for general public. Whereas, the Uzbek Embassy had a significant number of bilateral meetings with the top tier of business community including several associations and unions. The same sentiment was reciprocated by Pakistani side when more than 50 companies paid visit to Uzbekistan with the purpose of investment. There were a number of exhibitions, events and investment forums in Tashkent, Jizzakh and Bukhara. Eight different Pakistani companies participated in such events.
Uzbekistan and Pakistan have also been working on 38different joint ventures for launching import/export operations.
In economic sphere, Islamabad and Tashkent hold great trade potential. In just 2018, the mutual trade between both countries crossed USD 98.4 million’s mark, which means a raise of around 170%.Prior to 2018 in 2017 numbers of economic activity between two states were low and accounted for just USD 36.6 million.
In 2018 Pakistani export to Uzbekistan increased for 150% and amounted 66 million USD (in 2017 – 26 million USD).
Last year Ambassador of Uzbekistan to Pakistan Mr. Furqat A. Sidikov while addressing business community at Islamabad Chamber of Commerce and Industry expressed that trade volume between Pakistan and Uzbekistan has the potential to rise up to USD 1billion in next 5-6 years. It clearly signifies that both countries can provide enormous benefit to each other’s socio-economic segment. Pakistan has been exporting edibles like mango, citruses, raw and refined sugar. Furthermore, chemical products, pharmaceutical products, and leather and textile goods are major exports of Pakistan to Uzbekistan.
Uzbekistan is also a hub for petrochemical goods, cotton and silk goods. Its exports to Pakistan includes: leather raw materials, petrochemical products and mineral fertilizers, cotton yarn, cotton fiber, raw silk, plastic products, agricultural machinery, clothing, etc. Not only this, dry fruits and vegetables are also exported from Uzbekistan to Pakistan.
In 2018 Uzbekistan-Pakistan Business Council was established in Islamabad in order to facilitate and support the business community in two countries. Apart for this, several forums are also established in main cities of Pakistan to boost up the economic potential.
Accessibility remains a key subject in establishing people to people relations thus recognizing this flight route from Tashkent-Lahore-Tashkent was resumed in April of 2017. Both states also look forward to initiate new routes from Islamabad and Karachi as well. Earlier in May Uzbekistan’s Ambassador to Pakistan had a meeting with Chairman Senate of Pakistan to discuss the inter-parliamentarian cooperation between Pakistan and Uzbekistan. Sideways to expanding parliamentarian relations it was also discussed to further strengthen the cooperation on transport sector to provide uninterrupted route to trade of goods.
Both countries share many economical and regional platform and are member of Organization of Islamic countries (OIC), Shanghai Cooperation Organization (SCO), and Economic Cooperation organization (ECO)and others. Multiple times these platforms were used to freshen up the relations between two countries. Based on mutual trust both countries can have free trade agreements to amplify the relations between them.
Enormous potential lies in social, economic and political sectors on which both countries can work. Both countries can play a key role in bringing peaceful non-military solution to misery in Afghanistan as well as in the region. Pakistan needs to explore new avenues for cooperation with countries like Uzbekistan and extract the maximum benefit for itself.
Uzbekistan understands importance of Pakistan in keeping stability and prosperity of the whole South Asian region. Both countries are interested in continuing bilateral partnership on all key issues of the regional security and stability agenda, including the conflict resolution in Afghanistan and expansion of infrastructure, trade and economic ties between Central Asia and Pakistan.
Uzbekistan initiated logistic project that project will include the construction of the massive railroad transport corridor “Uzbekistan-Afghanistan-Pakistan”. In details, this corridor will compose the rail line “Uzbekistan-Mazarisharif” which has been already realized between Uzbekistan and Afghanistan as well as construction of new rail road “Mazari-Sharif-Kabul-Peshawar”.
In perspective, full realization of this unique transport corridor, will make Pakistan as a Central regional trade hub between South Asian and Central Asian regions.
No More Business as Usual: Improving Water Usage in Central Asia
Central Asia’s future economic development, including its energy and water security, depends to a great extent on how effectively countries manage their natural water supplies, especially under increased pressures from climate variability, economic growth, and population expansion.
The population of Central Asia is expected to grow by around 30% by 2050. As such, demand for water services will also increase significantly.
Central Asia is heavily dependent on agriculture, which provides livelihoods for about 50% of the population in some countries. But its level of water productivity is one of the lowest in the Europe and Central Asia region. More efficient use of water in the economy could significantly contribute to increased agricultural productivity, green energy production and the health of the region’s environmental assets.
According to estimates, the adoption of modern agricultural techniques and methods could increase the region’s crop yields by over 20% by 2030, and by 50% by 2050. On the other hand, if countries continue a “business as usual” approach, Central Asia is among the regions that could experience a significantly negative impact on GDP under climate change. Each year, inadequate water supply and sanitation leads to overall economic costs equivalent to around $2.1 billion, although these costs differ from country to country – ranging from almost 0.5% of GDP in Kazakhstan to around 4.25% in Tajikistan (2017 data).
“The water agenda in Central Asia is always viewed through the lens of the Aral Sea disaster,” said Ato Brown, World Bank Country Manager for Kazakhstan. “Today, it is high time for us to start changing the narrative so that Central Asia is known for being an oasis of production and productivity.”
According to a World Bank report, Central Asia is among the regions that have most to gain from properly managing water resources under climate change.
Most of the major rivers in Central Asia cross borders, therefore countries need to coordinate water management to advance sustainable development and climate resilience.
Water resources in the region are sensitive to climate variability, which poses significant challenges to the agriculture and energy sectors.
Since the 1950s, average annual temperatures have increased by 0.5°C in the mountainous areas of southern Central Asia, and glaciers that feed the region’s main rivers – Amu Darya and Syr Darya – have shrunk by a third. With the melting of glaciers, the expected fall in river flows will have a major impact on agricultural production.
By 2025, hydropower is expected to overtake gas as the main fuel source for energy production in Central Asia. Where hydroelectricity production is based on reservoir storage, there can be flow management benefits for climate change adaptation, including flood and drought prevention and mitigation, as well as timely delivery of irrigation and drinking water.
“Central Asian countries need to start with a joint project, and there are opportunities for working together,” said Ato Brown at the Astana Economic Forum. If the countries of Central Asia invest sufficiently and effectively in better water management, they have the potential to become not just economically prosperous and resilient to climate change – but also to provide new opportunities and hope for all their citizens.
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