New Kremlin point man Sergei Naryshkin arrived in Azerbaijan for wide-ranging talks Aug. 31 with the Azerbaijani leadership. After 17 years of working with Western powers, Baku is finding itself drawn back into the Russian sphere of influence. Sparks really will begin to fly as the former Soviet republic returns to its standard geopolitical status as a (shrinking) buffer between Russia and Iran.
Azerbaijan has enthusiastically courted Western powers ever since the Soviet breakup, seeking investment in its military and energy industries. But it has always known that its pro-Western proclivities could only exist at the pleasure of Moscow. Unlike Georgia to its west, Azerbaijan shares no border with a NATO country, so Baku always tried to tread softly (politically speaking) when the issue of Russian preferences arose.
With Russian power now rising, Azerbaijan is adopting a radically different tack than Georgia. Tbilisi sees the coming evolution as a zero-sum game, and as such, its public face has turned shrill in an attempt to keep the West engaged in order to avoid being crushed by Russian moves. By contrast, Baku is attempting to appease Russian strategic needs, while keeping its Western investment - and thus its source of income - intact.
Azerbaijan's real problems, however, are just beginning. The Russian resurgence is not happening in a vacuum but in parallel with the resurgence of Iran to Azerbaijan's south. Iran and Russia are far from natural allies, something poorly understood outside the Caucasus. The two have come into conflict several times in the past. Iran's most recent foreign occupier was the Soviet Union. Historically, Persian and Russian power has clashed - violently - along their mutual border.
The two states' relative friendliness since the end of the Cold War was a product of their weakness. As Iran recovered from its revolution and Russia fell from Soviet-era highs, the two countries' spheres of influence shrank so precipitously that their interests no longer rubbed up against each other. With no interests in contact, there were no interests in conflict. The two countries found it useful to cooperate not only in ways rhetorical - primarily lambasting the United States - but also in terms of weapons sales and technology transfers.
But the year is no longer 1998. Russia has had 10 years to climb up from its post-Soviet nadir and Russian power is pushing against all of its borders - including to the south. Similarly, Iran has recovered from its loss of 1 million people during the Iran-Iraq war in the 1980s. Tehran is now more confident than it has been in decades, and its influence is seeping into not only Iraq and the Persian Gulf, but also into the Caucasus and Central Asia - areas Moscow considers its exclusive playground.
And so warm rhetoric is giving way to cold calculations. Russia has stalled, and probably outright abandoned, efforts to finish the Bushehr nuclear power plant in Iran, in part due to the (accurate) concern that a resurging, nuclear-armed Iran would be more of a threat to Russia than to the United States (and even Israel). Russia also is laying the groundwork for a geopolitical twist by mooting the idea of allowing the United States sustained access to the Gabala radar base in Azerbaijan, a radar base designed to monitor Iranian airspace.
And it should be no surprise that it will be in Azerbaijan that Iran and Russia will face off most directly. Azerbaijan, the buffer between the two, has a foot in each camp: Its population speaks Russian, but is historically Shiite in religion, making it a natural rope in the coming Russian-Iranian tug-of-war. An additional complication will be Armenia - which both Russia and Iran unofficially have supported in its military efforts to take control of Nagorno-Karabakh, an Armenian-populated enclave within Azerbaijan.
The most brutal, and unfortunately most likely, consequence in the midterm is that the two powers will fight a proxy war in the Caucasus using Armenia and Azerbaijan as their pawns. In large part, this is because such a war is inevitable. Azerbaijan's newly developed energy wealth - it is now producing about 1 million barrels per day of crude and some 10 billion cubic meters of natural gas, and as a result is enjoying an annual gross domestic product growth rate in excess of 30 percent - has empowered it to go on a military buildup of a sort the region has not seen since World War I as a step toward recovering its territory from Armenian forces. With a war coming, and Russian-Iranian competition building, the two larger powers will be motivated to shape to their own advantage the conflict between the two minor powers. The only thing that remains unclear is which side Russia and Iran will support more thoroughly.
Turkmen President Gurbanguly Berdymukhammedov on Aug. 31 inaugurated the construction of a new natural gas project that will ship Turkmen natural gas currently destined for Russia to China instead. The event marks the formal beginning of a conflict between Russia and China for control of the entire Central Asian region.
The Chinese Gambit
China's desire for strong connections with Central Asia is neither new nor secret. Ever since China opened up to the world in 1979, it has been apparent that the country needs access to ample markets and resources, and that in turn has made China utterly dependent on maritime trade. Until China commands a sizable blue-water navy capable of reliably projecting power at least as far as the Persian Gulf -- which is to say, until it has a navy that can, without backup from its own land-based aircraft, pose a threat to the U.S. Navy -- China will remain at the mercy of U.S. foreign policy for its industrial, energy and trade policy. Since China desperately wants to avoid a confrontation with Washington so it can focus on its internal problems, the only way for China to square the circle is to develop a wholly land-based energy supply system that is out of the reach of U.S. fleets. Simply put, China's strategic imperatives dictate dealing with Central Asia.
A series of deals signed with Central Asian leaders Aug. 19 is actually the finishing touch on a project that has long been in the works. Since the mid-1990s, China has been engaging in energy projects, getting its foot in the door across Central Asia, particularly in Kazakhstan. This started with small oil fields in northwest Kazakhstan and gradually built into networks of fields, along with a few larger projects. In time, Chinese state firms built a pipeline to connect their projects to other infrastructure just north of the Caspian Sea.
Over the last few years, China has started linking up pieces of old Soviet-era pipes, with the goal of ultimately Frankensteining together a line reaching all the way from the Caspian across Kazakhstan to Western China. Parts of it already are operational, shipping roughly 200,000 barrels per day (bpd) from central Kazakhstan to China. One of the Aug. 19 deals provides the money for the last stitch in Central-Western Kazakhstan. Once it is complete, China's very first line -- the one near the Caspian -- will be reversed and linked in, and the entire project should be pumping approximately 400,000 bpd of Kazakh crude to China by 2009. Later stages will aim to increase the pipe's capacity to 1 million bpd.
Pipeline projects, of course, have political aspects, since they solidify relationships between producers and consumers (and cut out everyone else), but Russia has not shown much concern over this Kazakhstan-China oil pipeline. Russia understands energy politics better than most, and it knows that, ultimately, natural gas is truly the tie that binds -- far more so than oil. Oil is a liquid, and liquids can be shipped not only via pipeline but also via rail, truck, barge and tanker. Oil also is used in such a range of products that there are many substitutes for many of its uses. So, while an oil pipeline certainly creates a relationship, it does not necessarily create a two-way dependency between the producer and consumer.
Natural gas does create that dependency. Natural gas is, well, a gas and therefore is very difficult to ship by any means other than pipeline. (It can be liquefied and shipped via ocean-borne tanker, but oceans are hard to come by on the landlocked steppes of Central Asia.) Unlike oil, natural gas is used primarily for energy generation in specialized facilities, which means -- among other things -- that there are no easy substitutes. Once a state is hooked into a natural gas network, breaking away is very hard to do. Russia has used this not only to bind the states of the former Soviet Union to its will but also to consistently affect the politics of states in Europe dependent on Russian supplies.
The other Chinese-Central Asian energy deal signed Aug. 19 involves just such a natural gas project linking Turkmenistan to China. Like the oil pipeline farther north, the natural gas line will consist of pieces of stitched-together Soviet infrastructure in a route that will take it through Uzbekistan and Kyrgyzstan. The proposed pipe would take 30 billion cubic meters (bcm) of Turkmen natural gas -- roughly half of Turkmenistan's export capacity -- and ship it to China.For China, these are all business deals. China has the interest, the need, the market and the money, so it is building the pipelines. The Central Asians are suitably impressed by the idea of cold cash backing up new infrastructure, particularly after 17 years of Russia building little new infrastructure and allowing the old to rust on the steppes. But in running a pipe from Turkmenistan, China is in effect drawing a knife across the map of Central Asia, slicing off the southern four "stans" from their traditional overlord: Russia.
Russia has financial and geopolitical reasons for opposing China's move.First is the money issue. China plans to take natural gas for its line that is currently supposed to be sent north to Russia. True, China's plans do involve developing greenfield projects in Turkmenistan -- on Aug. 30, China National Petroleum Corp. received Turkmenistan's first post-Soviet license to develop onshore natural gas projects in the country's Mary and Amu Darya regions -- but these deals will be insufficient. Not only will it be years before they begin producing appreciable amounts of natural gas, but 17 years of mismanagement also has made Turkmen output unstable. So, at least for the next five years, whatever natural gas is shipped to China must come from production that would normally be shipped to Russia. At European retail prices, that alone will cost Gazprom $9 billion annually in sales.But this is about more than "just" money. Gazprom is responsible for supplying Europe with approximately one-quarter of the natural gas it uses, approximately 150 bcm per year. But Gazprom lacks the skills and capital to both fill its European export commitments and supply the Russian market. To bridge the gap, Russia maintains a stranglehold on Central Asian natural gas exports via Soviet-era infrastructure, buying up nearly every molecule of the stuff exported from Turkmenistan (45 bcm), Uzbekistan (10 bcm) and Kazakhstan (10 bcm).
If Russia did not have those Central Asian supplies, Moscow would either have to let Russians freeze or give up a goodly portion of its energy leverage over Europe. (Technically, most Turkmen natural gas is purchased by Ukraine, but since it must pass through Gazprom's pipeline network en route to Ukraine, for all intents and purposes, Turkmen natural gas is fully integrated into the Russian system, with all the political connotations that suggests.) With the Red Army only a fraction of its former size and the Russian nuclear deterrent weakening, the energy hammer is one of Russia's few easily usable, reliable policies. China's Central Asian gambit would brand Russia an unreliable supplier and remove that very useful hammer from the Kremlin's geopolitical toolbox.
It also is extremely unlikely that China's encroachment into Central Asia will halt with just a Turkmen natural gas deal. If the region's primary energy infrastructure flows east to China -- and through both Uzbekistan and Kyrgyzstan -- then it is eminently likely that Uzbek exports, too, will soon flow east rather than north. With the supplier states realigned, the consumer states of Kyrgyzstan and Tajikistan would have little choice but to look to China to ensure their energy supply security. The web of relationships that holds Central Asia close to Russia would be respun with China at the center, drastically revamping the region's balance of power to China's benefit.
For years, China's slow energy-spearheaded movement into Central Asia went unchallenged by the Kremlin; after all, it was limited for the most part to a disaggregated collection. But with the sudden surge in Chinese natural gas plans, Russia can no longer afford to do nothing while its erstwhile "ally" casually takes over Russia's southern flank. The question in Russia, of course, is what to do about it.
Culturally, Russia has a blind spot as far as China is concerned dating back to the time of Josef Stalin. Russians traditionally (which is not to say accurately) see China as the little brother who would -- of course -- never do anything without Russia's permission. In the Russian mind, rhetorically China is a Russian ally that is theoretically committed to building a multipolar world to hedge in U.S. power. As Russia is discovering, however, the key words in that sentence are "rhetorically" and "theoretically"; China looks out for China's interests, and it is in China's interests to have a strong economic relationship with Washington and ever-closer economic and political ties with Central Asia.
Russia's realization that its world view needs an update has been long in coming, but sources indicate Russian President Vladimir Putin has -- angrily -- come around. Realization will lead to retaliation, since Russia cannot hope to resurge its influence if its southern flank is not secure.The first stage of the Russian pushback will be to hold quiet talks with Central Asia's leaders and remind them of their "priorities." Putin himself, who is of the mind-set that the Central Asian leaders are cheating on him, plans to deliver this message at an as-yet-unscheduled meeting with the Kazakh, Turkmen and - likely -- Uzbek heads of government. Should that fail, the next step would be a reminder to these same leaders that Russia retains a very long arm. The Kremlin tends to get personal in delivering such reminders, and it is likely there will be some reports of people close to Central Asian leaders committing suicide with five bullets to the head from a sniper rifle from across the street.
The bottom line is that the geopolitical imperatives of Russia and China -- always uneasily tolerating each other -- are now grating against one another in what is truly a zero-sum game. Only one of them can have Central Asian natural gas, and whoever controls that gas ultimately controls the region.
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