1. Introduction
1.1. Background
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Chapter 1 Introduction
1.1. Background
The collapse of the Soviet Union in 1991 paved way to the creation of five new states in Central Asia. See map 1.1. Especially three of them: Kazakhstan, Uzbekistan and Turkmenistan, have become both the object of international rivalries in Central Asia and the sources of new political forces as they act to enlarge their independence in world politics1. This rivalry is particularly strong in the struggle among these states to increase positions of leverage over the energy economy, e.g. production, pipelines, and refining in Central Asia, because this region is blessed with enormous energy deposits.
Map 1.1 Central Asia
Sources: Afghanistan and Central Asia Research Information
1Stephen Blank, "Energy, Economics, and Security in Central Asia: Russia and Its Rivals,‖ 1995, http://www.strategicstudiesinstitute.army.mil/pdffiles/pub119.pdf access July 2011.
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Despite their distant location and underdeveloped economies, the five post-Soviet republics of Central Asia – Kazakhstan, Turkmenistan, Kyrgyzstan, Uzbekistan, and Tajikistan – have attracted the attention of the United States, Russia, China, and European states.2 All five states have unexploited energy resources at a time when most kinds of fuels have become much more expensive.
These deposits are crucial to Central Asia‘s integration with the world economy and economic progress. Indeed, energy exports may be the only way these governments can hope for any economic stability and progress in the future. Therefore, whoever controls the energy economy will determine the destiny of these countries.
―The larger countries in and around the region, particularly in South Asia, comprise major sources of demand for energy, much of which cannot be satisfied from domestic sources.‖3 Thus there seems to be great potential for regional energy development and trade which can benefit all of the countries of the region. There are opportunities for natural gas trade from gas-surplus countries like Turkmenistan and Iran to gas-deficit countries ex. Pakistan and India.
―…Currently all Central Asian gas exports (outside that region) are purchased by Gazprom for forward sale to (mainly) CIS countries….‖4 But with a pipeline connection to China, and a number of proposals to bring Central Asian gas to European markets by pipeline, competition is becoming more intense. It is in this context, Central Asian states gas has become more important in the XXI century and will become increasingly important as major hydrocarbon developments at this is region progress. Fundamental issue to trade natural gas is pipeline system. See map 1.2
2 Dina R. Spechler and Martin C. Spechler, Central Asia. Trade, energy, and security in the Central Asian arena, Seattle, USA: National Bureau of Asia Research, 2006, p. 219.
3 William Byrd and Martin Raiser, ―Economic cooperation in the wider Central Asia region," 2006,
http://siteresources.worldbank.org/INTSOUTHASIA/556101-1101747511943/21363080/WiderCAWorkingPaperfinal.pdf access July 15 2011.
4 Shamil Midkhatovich Yenikeyeff, "Kazakhstan‘s gas: export markets and export routes,"2008, access July, http://www.oxfordenergy.org/pdfs/NG25.pdf, access July 15 2010.
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All the newly independent Central Asian states are super-presidential authoritarian regimes with unclear procedures for succession to the present leadership.
Any future instability would be a threat to the energy supplies and security cooperation outside powers wish to have in the Central Asian arena5.
Turkmenistan is important to world energy markets because of its big oil and natural gas reserves. It may be said that Turkmenistan resembles one big oil-gas field.
After years of foreign investment into the country‘s oil and natural gas sectors, the landlocked Central Asian state has recently begun to realize its enormous production potential. Turkmenistan could become a major world energy producer and exporter over the next decade.
Under former president Saparmurat Niyazov, Turkmenistan was Central Asia‘s most repressive and isolationist state. Similar situation is happening under present president of Turkmenistan Gurbanguly Berdimuhammedov. There has been no sign of political liberalization.
The Republic of Kazakhstan is the ninth largest territory in the world is located near the center of Eurasian continent and neighbors on Russia, China, Iran and Afghanistan. Central Asia was on the periphery of international process during the first years of independence. Kazakhstan is Central Asia‘s economic leader. Its gross domestic product (GDP) is greater than that of other four republics combined6.
After strong lobbying Kazakhstan has attained chairmanship of the Organization for Security and Cooperation in Europe (OSCE) in 2010. However, political reforms have not kept pace with economic development. Power remains concentrated in Nazarbayev‘s hands, and opposition politicians come under intense pressure. There is a common interest in preserving stability that may contribute
5 Dina R. Spechler and Martin C. Spechler, Central Asia. Trade, energy, and security in the Central Asian arena, Seattle:
National Bureau of Asia Research, USA 2006, p. 206.
6 "Central Asia‘s energy risks", 2007,, http://www.crisisgroup.org/~/media/Files/asia/central-asia/133_central_asia_s_energy_risks.ashx, access July15 2010.
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leadership is aware of the potential problems.Uzbekistan is the second largest natural gas producer in the Commonwealth of Independent States (after Russia) and one of the top ten natural gas-producing countries in the world7. Uzbekistan produces natural gas from 52 fields in the country, with 12 major deposits, accounting for over 95% of Uzbekistan‘s natural gas production8. Uzbekistan is probably the country with the greatest risk of instability among Central Asian states. The regime of President Islam Karimov is one of the most repressive in the former Soviet Union. More than anything, its economic policies have angered the population of over 26 million9 .