Russian-Turkmen pacts mark strategic shift for Moscow in Central Asia

Igor Torbakov

Russia and Turkmenistan have reached two deals – one on long-term energy exports, the other on bilateral security – that may have a broad impact on Central Asian geopolitics. The economic pact captured the bulk of the headlines, but experts in Moscow say the security agreement marks an important shift in Russian foreign policy in the region.

The economic component of the energy deal is undoubtedly significant, as Russia badly needs Turkmen natural gas deliveries, while Ashgabat is keen to secure a stable market for its main hard-currency export. However, both the gas contract and the security accord should also be viewed within the context of recent developments in Iraq, political analysts in Moscow say.

Moscow is keen to monopolize the transit of the Turkmen gas. Such a monopoly would enhance Moscow’s ability to project its influence across Central Asia. "Moscow hopes to broaden its influence in Central Asia and restore its weakened geopolitical position," said an editorial published by the Nezavisimaya Gazeta newspaper.

For his part, Turkmen leader Saparmurat Niyazov, who presides over one of the world’s most repressive governments, appears to feel endangered following the collapse of Saddam Hussein’s authoritarian government in Iraq. Looking for allies and possible protectors, Niyazov appears to have turned to Russian President Vladimir Putin for support.

The accords were signed during Niyazov‘s visit to Moscow on April 10-11. Under terms of the strategic energy deal, Turkmenistan is to supply 2 trillion cubic meters of natural gas to Russia through 2028. Aleksei Miller, the CEO of the Russian gas giant Gazprom, hailed the agreement as "a revolutionary breakthrough in the cooperation between the two great gas powers." According to Niyazov’s estimates, the deal could be potentially worth $500 billion over its 25-year lifespan, with Ashgabat earning around $200 billion and Moscow receiving $300 billion.

A number of experts point out, however, that the deal’s structure raises questions about whether it will fulfill its economic potential. For example, although the pact covers the next quarter-century, the nature of the business relationship between Gazprom and its Turkmen partner Turkmenneftegaz is clearly defined only for a three-year period.

At first, the Russian gas monopoly will start buying relatively small amounts of Turkmen gas. In 2004 Gazprom will purchase 5-6 billion cubic meters, upping the purchases to 10 billion cubic meters in 2006. During this period Russia will be paying $44 per thousand cubic meters of natural gas. Half of this sum is to be paid in cash, the rest in goods and services. Starting from 2007 Russian purchases will jump to 60-70 billion cubic meters and to 70-80 billion in 2009. "We are ready to supply to Russia up to 100 billion cubic meters of gas starting from 2010," Niyazov said at the signing ceremony in the Kremlin. It is not clear, however, what will be the price of Turkmen gas after 2006. "How much Gazprom will have to pay for the deliveries in three years’ time is not known. We will have to start bargaining [with Turkmenistan] again," analysts Andrei Reut and Liudmila Romanova wrote in a commentary published in the Gazeta daily.

What appears certain, analysts say, is that within three years Russia will likely lose its right to a barter-type payment for half of the purchased gas. In this case, the experts argue, Gazprom’s costs will rise by $2 billion annually.

Moscow observers point out that Russia appears to be paying a premium price for Turkmen gas. During a Niyazov visit to Moscow in 2002, a bilateral gas deal collapsed due to the inability of the two sides to agree on a price. At the time, Turkmen officials insisted on the price of at least $42 dollars per thousand cubic meters of gas. Russian negotiators said the price was too high. Now, under the 25-year deal, Moscow has agreed to pay $44 per thousand cubic meters. Yet only a month ago, the influential business daily Vedomosti reported, Aleksander Riazanov, one of Gazprom’s top executives, said a "fair price" for the Turkmen gas is not $44 but $25-$27 per thousand cubic meters.

The pricing structure has prompted many political commentators in Moscow to say political considerations exerted considerable influence over Moscow’s negotiating strategy. What was signed in the Kremlin is above all a "political gas [contract]," asserts Mikhail Klasson in a commentary published in the Vremya MN daily.

Significantly, along with the gas deal, Putin and Niyazov agreed to abrogate the dual citizenship treaty that had been in effect since 1993. The two countries signed a security accord and a protocol confirming the Friendship Treaty between Turkmenistan and Russia.

Niyazov had long sought the repeal of the dual-citizenship agreement. In January, he tried to unilaterally annul the agreement, but backed down in the face of a strongly negative reaction by Russian officials. During their April summit, however, Putin apparently thought it appropriate to make a concession to Niyazov. The agreement has fulfilled its role, and "the people who wanted to move to Russia have basically resolved this problem," the Russian president said. Many observers view the situation differently. "The people who hold Russian passports and reside in the ‘tsardom of Turkmenbashi’ have lost the last guarantee that their rights will be protected," comments the regional analyst Arkady Dubnov in the Vremya Novostei newspaper.

Strategically, the dual-citizenship agreement is overshadowed by the Russian-Turkmen security agreement. Weeks before details of the gas deal were unveiled, a number of Russian analysts were arguing that, under current circumstances, Moscow should increase its strategic cooperation with Ashgabat. They noted that Turkmenistan borders Afghanistan and Iran – key Asian states that are not the CIS members. "The Iraq crisis has only increased the significance of the so-called Caucasus-Central Asian arc that is again turning – in the Russian leadership’s strategic plans – into a vital southern security belt," Rossiiskie Vesti said in an editorial.

Niyazov, too, has its own interests in closer relations with Moscow. The Turkmen leader was sharply criticized after he reportedly orchestrated show trials in the wake of the purported assassination attempt against him last November. [For background see the Eurasia Insight archive].

Prior to the Iraq crisis, Russian policy makers appeared open to pressing Niyazov to ease up on repressive measures. For example, Izvestiya political columnist Aleksander Arkhangelskii argued that an attempt by Moscow to exert pressure on Niyazov’s regime would help Russia "demonstrate the true ambitions of the potentially strong law-governed state."

The US blitz against Iraq appears to have dramatically altered Russian strategic thinking, however. Confronted with growing US assertiveness, the bulk of Russia’s analytic community now believes it is in the country’s best security interests to seek accommodation with Central Asia’s authoritarian rulers, rather than to confront them. After Iraq, "Russia will have to agree with the existence on its southern periphery of the clearly anti-democratic, or more precisely, outrightly dictatorial regimes," one Moscow political scientist suggested.

Putin seemed to hint at the linkage between the Iraq crisis and Moscow’s current policies vis-а-vis Central Asia when he said that the Russian-Turkmen security agreement will "make our efforts to counter outside threats more systematic and efficient." Naturally, political observers feel less constrained in their analyses than the Russian president does. "Russia will protect Turkmenistan from the United States for $300 billion," Yevgenii Yevdokimov bluntly wrote in a commentary posted on the Strana.ru website.

Editor’s Note: Igor Torbakov is a freelance journalist and researcher who specializes in CIS political affairs. He holds an MA in History from Moscow State University and a PhD from the Ukrainian Academy of Sciences. He was Research Scholar at the Institute of Russian History, Russian Academy of Sciences, Moscow; a Visiting Scholar at the Kennan Institute, Woodrow Wilson International Center for Scholars, Washington DC; a Fulbright Scholar at Columbia University, New York; and a Visiting Fellow at Harvard University. He is now based in Istanbul, Turkey.

http://www.eurasianet.org/departments/insight/articles/eav041503.shtml