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Kyrgyzstan: What’s Cause Of Latest Russian-Kyrgyz Energy Row? – Analysis

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Political observers are trying to determine the cause of the latest energy-supply spat between Kyrgyzstan and Russia. Some see a connection to a Customs Union comprising Belarus, Kazakhstan and Russia. Others believe it was nothing more than a PR stunt undertaken by Kyrgyz Prime Minister Almazbek Atambayev in order to fuel his presidential ambitions.

The fuel supply crisis began in late May, just weeks before the new Customs Union was scheduled to enter into effect on July 1. Faced with domestic shortages, Kazakhstan banned the export of refined petroleum products and asked its union partners to do the same. By mid-July, as Kyrgyz reserves ran dry, petrol prices increased sharply in Bishkek and elsewhere. Meanwhile, Gazprom Oil Asia, a subsidiary of Russia’s state-controlled Gazprom, which runs a network of gas stations in Kyrgyzstan, began rationing fuel to customers. Gazprom supplies almost 70 percent of Kyrgyzstan’s petrol, according to Jumakadyr Akeneev, the head of Kyrgyzstan’s Oil Traders Association.

Kyrgyzstan
Kyrgyzstan

As gas stations began running out of petrol on July 19, Atambayev made an unscheduled trip to Moscow to meet with Russian Prime Minister Vladimir Putin, just as he did during an earlier tax dispute in December. Putin promised to resume tax-free petrol deliveries. Russia’s paramount leader also noted that his July decision would “create conditions for expanding our cooperation in key areas,” according to a statement released by the presidential press service following the July 20 meeting.

The episode fits a well-established pattern in which Russia uses energy policy and fuel supplies as a means of exerting pressure on Kyrgyzstan. In this latest instance, the trigger for the Kremlin’s sudden action was supposedly the illegal smuggling of Russian fuel from Kyrgyzstan to Tajikistan. Kyrgyz traders reportedly have been improperly funneling thousands of tons of petrol across their porous southern border with Tajikistan since March, when Moscow implemented a prohibitive new excise tax on fuel destined for Tajikistan.

In addition to putting an end to smuggling, some analysts believe Moscow harbors a much larger goal – to exert greater economic influence over Kyrgyzstan and Tajikistan via both countries’ incorporation into the Customs Union. Such action would help defend Russia’s economic interests in Central Asia against China, which is currently flooding the region with cheap exports.

In exerting its influence this way, the Kremlin has shifted from focusing on individual power brokers to “processes” affecting the region – such as fuel imports and trade policy – said Bishkek-based political analyst Mars Sariev. “Earlier Russia manipulated certain personalities. Now it manipulates processes, crises, and the resolution of these issues directly depends on the Russian Federation.”

“Russia and Kazakhstan, as members of the Customs Union, seek to pull in other [post-Soviet] republics, making it clear to them that without a unified economic space it will be difficult for them to develop,” Sariev explained.

Alexander Knyazev, an observer considered close to the Kremlin, insisted that Moscow has no interest in Kyrgyzstan’s entry into the Customs Union. Moscow is simply trying to ensure the fragile country – which was overwhelmed by political and ethnic violence last year – does not implode, said Knyazev, a Central Asia expert at the Russian Academy of Sciences.

It is the fuel smuggling to Tajikistan that most irks Moscow, says Knyazev. At their meeting, Putin reportedly told Atambayev that the smuggling – up to 1,000 tons per day, according to Atambayev’s office – must stop.

“The [Kremlin’s] motives are purely political – not to see Kyrgyzstan fall apart,” Knyazev told EurasiaNet.org. Kyrgyzstan’s economy is so small that Russia has no interest in seeing the country join the Customs Union, he added. “Kazakhstan is Russia’s Customs Union partner, and more generally there’s no comparing the significance of Kazakhstan and Kyrgyzstan for Russia, in terms of economics, politics, military or anything else.”

Even so, hints that Moscow would like to see Kyrgyzstan join are plentiful. In a July 20 analysis, for example, Russia’s state-controlled RIA Novosti news agency compared the bloc to the European Union’s common market and said that other former Soviet states, specifically Kyrgyzstan and Tajikistan, “are supposed to join later.”

Atambayev has long argued Kyrgyzstan should join the Customs Union. His insistence – which may be winning him support in Moscow — has prompted criticism at home that he is leading Kyrgyzstan too close to Russia. Opposition politicians say Kyrgyzstan’s membership in the World Trade Organization is incompatible with the Customs Union’s trade rules. Membership would end the lucrative transit market Kyrgyzstan has developed for Chinese products, they point out.

Kyrgyzstan is preparing to hold a presidential election in late October. His successful trip to Moscow may well give Atambayev a boost just before campaigning begins in earnest. A northerner, he is likely to face an array of challengers in his home region. High-profile southern politicians, in particular Kamchybek Tashiev, the leader of the nationalist Ata-Jurt party, are also expected to make a presidential run.

With the looming election in mind, some analysts see the fuel-supply crisis, as well as Atambayev’s triumphant return from Moscow, as a stage-managed affair intended to solidify his position as a presidential front-runner. “This course aims to characterize Atambayev as a hero, a savior who can effectively run the country,” Toktogul Kakchekeev of the Association of Political Analysts said in comments carried by the 24.kg news agency.

Bakyt Ibraimov contributed reporting.

Eurasianet

Eurasianet

Originally published at Eurasianet. Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on the most important developments in the region. A tax-exempt [501(c)3] organization, Eurasianet is based at Columbia University’s Harriman Institute, one of the leading centers in North America of scholarship on Eurasia. Read more at eurasianet.org.

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