GROWING UNCERTAINTY IN KYRGYZ-RUSSIAN RELATIONS

By Bakyt Baimatov (05/30/2012 issue of the CACI Analyst)

In mid-March 2012, the Russian Migration Service announced a halt to the previously introduced simplified procedures for granting Russian citizenship to Kyrgyz labor migrants.  On April 23, Russian President Dmitri Medvedev dismissed his special representative to Kyrgyzstan and denounced the post. The moves came after President Atambaev demanded that the Kremlin pays its arrears for renting military bases on Kyrgyz soil and threatened to close the Russian airbase in Kant. 

BACKGROUND: During his presidential campaign in 2011, the incumbent Kyrgyz President vowed publicly to close the U.S. Manas air base in 2014. In search for Russian support, he repeatedly termed Russia a strategic partner and made numerous promises to meet previous commitments if elected. As Prime Minister, Atambaev sought the Kremlin’s consent to write off half of Kyrgyzstan’s external debt to Russia, amounting to US$ 180 million. In return, Bishkek agreed to hand Moscow 48 percent of its shares in the Dastan torpedo factory and 75 percent of its shares in the Kyrgyzneft and Kyrgyzgaz oil and gas companies.

However, during his March visit to Moscow the President-elect Atambaev declared major alterations of his policies towards Russia. He made clear his determination to revise the majority of Kyrgyzstan’s earlier agreements with Russia, including those made by his predecessor on Russia’s military presence in Kyrgyzstan.

In particular, Bishkek objected to the deployment of new military bases, including an anti-terror training facility in the southern town of Batken under the Collective Security Treaty Organization (CSTO). This runs counter to Moscow’s plans to transform its military presence in Kyrgyzstan into a full-fledged base with a lease term for 49 years and further automatic prolongation for 25 years. In 2009, Moscow entered into agreement with then president Kurmanbek Bakiev to open a CSTO training facility in Southern Kyrgyzstan. This agreement is now at risk, and the Kremlin perceives Bishkek’s revisionist approach as an attempt to pressure Moscow to increase its lease pay.

Given the chronically underfinanced Kyrgyz budget, economic agreements with Russia have also seen major changes. Bishkek now demands a market price for shares in the Kyrgyzneft and Kyrgyzgaz companies and other assets. Further, Kyrgyz authorities planned to offer bids to Russian companies for the construction of six hydroelectric stations in Kyrgyzstan. In return, Moscow promised Bishkek a US$ 30 million grace period loan as well as a US$ 106 million loan from the EurAsEc Anti-Crisis Foundation. This time, however, Atambaev agreed to offer Moscow mere 48 percent of the Dastan shares in return for a debt write-off. The remaining shares are expected to be sold to Russia at market price. Bishkek threatened to sell its assets to China, Turkey or the U.S. should the Kremlin disagree.  

Taken aback by Bishkek’s unexpected revisionist position, Moscow’s reaction was more restrained than expected. Russian authorities confirmed their commitments to pay their lease bills for using military infrastructure in Kyrgyzstan. At the same time, the Kremlin made covert allusions to the magnitude of Bishkek’s current external debt to Russia which now stands at US$ 493 million. Moscow made it clear that the unresolved status of this problem is detrimental to Bishkek’s negotiating position.  

IMPLICATIONS: Another important sign of an increasingly strained relationship is that the Kremlin has also renewed its previous commitments and refused refinancing loans to Bishkek. This is a strong indication that Moscow will use Bishkek’s debt as a lever to make Atambaev meet all previous commitments.

Russia’s economic or military assistance to Kyrgyzstan is currently preconditioned by Bishkek’s capability to meet its obligations. As a retaliatory measure, Moscow is toughening its position on a wide range of issues in its relations with Kyrgyzstan. The earlier approved US$ 106 million loan from the EurAsEc Anti-Crisis Foundation is currently frozen. According to the revised economic agenda, the Kremlin now wants 75 percent of the Dastan shares instead of the 48 percent demanded previously. Moscow also aspires to receive 75 percent of the shares in the US$ 2 billion construction of a hydroelectric power station in Southern Kyrgyzstan.

The new Kyrgyz leadership has also prompted a good deal of speculation around the future fate of the U.S. Manas air base. During his first official visit to Turkey, the Kyrgyz President-elect proposed to transform the current status of Manas into a Civil Facility of Transit and Transportation when the lease term expires in 2014, and offered Turkey and Russia to get involved as well as other stakeholders.

Bishkek’s turn towards Turkey and its attempts to involve Ankara in the future development of Manas demonstrates that Bishkek is interested in building closer ties with Turkey as a strategic partner with growing regional ambitions. Fluent in Turkish, Atambaev established close personal and business relations with Turkish elite groups when serving as Prime Minister. These relations are now being transformed into a stronger political agenda given Ankara’s rising military and political stature in vying for a dominant position in the Turkic world.

Facing severe budget pressures at home, the Kyrgyz president seemingly chooses to continue a multi-vector foreign policy drifting towards Turkey as an alternative to Russia. Ankara is increasingly strengthening its role in the Caucasus and Central Asia where Kyrgyzstan is regarded as a loyal ally. Not least important in this connection is that Ankara has agreed to write off half of Bishkek’s external debt and set up a multi-million investment forum. Another motivation for a close rapprochement with Turkey is clear in Bishkek’s strategy to eye Turkey as an alternative pole of economic power and a counterbalance to an unpredictable and ambiguous Russia.

Bishkek’s renewed position on the fate of the U.S. air base and the possible prolongation of its lease after 2014 will most certainly result in tense relations with Russia. In late 2011, CSTO member countries signed an amendment to the Charter of the Treaty which requires them to seek the unilateral consent of other members on the location of foreign military bases in CSTO countries. The amendment is hailed by Russia as “important and critical,” and states that “Military bases of third countries may be established and located on the territories of CSTO members provided there is a unilateral and official consent of all member countries.” The initiative was put forward by Belarus and eagerly supported by Russia and Kazakhstan, the most powerful regional actors in the EurAsEc and the Customs Union.   

This implies that Kyrgyzstan may face opposition from other CSTO members if Bishkek agrees to extend the lease of the U.S. air base after it runs out in 2014. Given that Kyrgyzstan aspires to enter Customs Union and later the Eurasian Economic Union, the country risks regional isolation and unprecedented pressure from Russia and its closest allies. The Kremlin can capitalize on its leading role in the CSTO to pressure Bishkek to suspend the lease agreement on the Manas airbase after 2014 and curb its attempts to boost the lease pay for Russian military bases in Kyrgyzstan. Further, Russia could suspend its promise of a US$ 106 million loan to Bishkek from the EurAsEc Anti-Crisis Foundation. Next, quotas for Kyrgyz labor migrants could be reduced and fuel prices increased. The latter measures are fraught with public protests and spontaneous riots in the South of Kyrgyzstan, which is dependent on cheaper Russian fuel supplies and where unemployment rates are on rise. Finally, the Kremlin may demand a payback of Kyrgyzstan’s official debt to Russia, and which Kyrgyzstan with its stalled economy is unable to pay.

CONCLUSIONS: It is premature at this point to describe Kyrgyzstan’s strategic drift from Russia towards Turkey as a significant geopolitical shift, but it appears evident that Bishkek tries to diversify its strategic course in search for other interested investors such as U.S.-backed Qatar and Azerbaijan. The latter countries have shown particular interest in water and hydroenergy resources in Kyrgyzstan and offered generous investments and construction of joint industrial and processing facilities. Turkey clearly sees its chance to gain a strong beachhead in Kyrgyzstan fostering Turkish language via setting up schools and universities staffed with Turkish instructors and numerous private businesses. Bishkek attempts to reap a maximum rewards from rapprochement with Ankara toughening its rhetoric towards Russia and trying bypass Moscow’s stick-and-carrots stance. In this sense, Bishkek’s traditional orientation towards Moscow demonstrates clear signs of weakening, exasperation and disappointment.

AUTHOR’S BIO: Bakyt Baimatov holds his MA degree from the University of Reading (UK) and PhD from the Institute of Political Studies, Vienna University. Currently, Bakyt resides in Geneva, Switzerland and works as an independent consultant with UN agencies.