Kyrgyzstan: Putin Visit Brings Lavish Deals And Vows Of A Bright Future

If Vladimir Putin went to Kyrgyzstan to wow his hosts, he more than succeeded.

His single day in Bishkek saw the signing of $6 billion in deals and Russia’s military airbase expanding by an area equivalent to around 70 football fields.

On the day of the visit, on March 28, Kyrgyz Economy Minister Oleg Pankratov offered a breakdown of how that dollar figure was reached.

“In the area of investment, memoranda, agreements and contracts worth $5.6 billion were signed. And provisional export contracts worth $589 million were signed,” he said.

The bulk of that amount — $3.7 billion — were reserved for deals in the power, mineral resources and hydrocarbon sectors. Another $1.3 were in industry. A remaining $450 million were deals to do with agriculture.

To get even more specific, the Kyrgyz state investment agency signed a $1.5 billion memorandum of cooperation with privately owned Moscow-based company Ruselprom.

“This is an agreement on cooperation in the field of hydropower, on the construction of large and small hydropower plants and the assembly of hydropower stations, hydraulic units and other equipment needed specifically for hydropower,” said the head of the state agency, Adilbek uulu Shumkarbek.

This was all a lot, but quite a bit short of the galactic $12 billion forecast volunteered earlier in the day by deputy Prime Minister Zhenish Razakov. Then again, it depends what was being counted, as there was a whole lot of wishful thinking going around.

Kanat Abdykerimov, the head of the Kyrgyz railways, claimed sensationally that his company and Russian Railways were to sign anywhere between $5 billion and $7 billion worth of memorandums of agreements to develop railway networks. Abdykerimov hopefully mentioned the mythical China-Kyrgyzstan-Uzbekistan route and the equally distant-feeling Kyrgyz north-south railroad initiative as areas to be focused upon. Those memoranda do not seem to have materialized and it was hard the shake the notion that Abdykerimov was wildly plucking figures out of the air.

The whole day was just an endless procession of these often notional figures.

So Putin declaimed at a meeting with this Kyrgyz counterpart, Sooronbai Jeenbekov, that Russia has since 2011 annually delivered 1.1 million tons of duty-free oil and oil-based products. The direct economic effect of this preferential treatment, he said, was worth $2 billion.

(As an aside though, it is worth noting that an awkwardly large proportion of Russian exports to Kyrgyzstan is accounted for by oil and oil-based products — 43 percent in 2018, according to Russian Energy Minister Alexander Novak.)

Jeenbekov noted that Russian investment in Kyrgyzstan in 2018 amounted to $123 million, a 25 percent increase year-on-year.

The overall point of all this was to dispel any lingering notions that Kyrgyzstan might have been rash in hitching its wagon to the Russia-led Eurasian Economic Union, or EAEU, in 2015.

Putin was adamant this decision has brought undoubted benefits.

“Trade between Kyrgyzstan and EAEU countries keeps growing. We have here a big delegation, a big contingent of regional Russian leaders to meet with partners. More than 200 businesspeople have come to see how cooperation can be expanded,” Putin said. “I agree with the idea that next year should be decreed the year of Russo-Kyrgyz cooperation.

Putin might have added that even as he spoke, dozens of trucks were backed up at the border of Kyrgyzstan and fellow EAEU member Kazakhstan, whose intermittent quasi-trade embargoes against its neighbor to the south have made a mockery of the customs union. As of the afternoon of March 29, there were around 140 trucks in line at the Ak-Tilek border crossing, waiting for time-consuming and stringent inspections by Kazakh officials.

Putin did say, however, that Russia was allocating $200 million toward upgrading customs infrastructure and border equipment in Kyrgyzstan to ensure the country’s exports meet EAEU technical requirements by 2020. This raises the obvious question of why Bishkek’s accession was not delayed until this had happened, which might have avoided leaving Kyrgyzstan in the position of theoretically paying more for Chinese imports without being able to smoothly gets its goods into the EAEU market. (Theoretically because a lot of Chinese imports are said to filter in without full customs payments, much to the chagrin of Kazakhstan).

It was not all about money and business though.

Kyrgyzstan has agreed to allow the Russian airbase in the town of Kant to expand to just a little over 850 hectares (2,100 acres), from 811 hectares previously. The Kant base performs the function of granting Moscow effective dominance over Central Asian airspace and, if the need were ever to arise, to deploy airborne assaults against militant incursions. It houses five Su-25 attack aircraft, four L-39 jet trainers and two Mi-8 helicopters.

Under a new arrangement agreed between the two nations’ military forces, Russian personnel will train their Kyrgyz colleagues in the use of unmanned aerial vehicles.

An anti-submarine armaments test facility at Karakol, in the Issyk-Kul region, is also growing larger, from the 55 hectares to 73 hectares.

Annual rent for these facilities is increasing in commensurate terms, to $4.8 million.

Another pair of Russian military facilities in Kyrgyzstan are a communications center in the northern Chui region, which is used for radio reconnaissance and electronic warfare, and a seismic laboratory in the southern town of Mailuu-Suu used to monitor the testing and use of nuclear weapons.