Analytical Articles

In accordance with its efforts to diversify its allegiance with major powers, Kazakhstan supports a strong U.S. economic and defense presence in Central Asia. The U.S. is equally interested in preserving Kazakhstan’s balanced relationship with the other great powers. Renewing the partnership requires realigning its focus as the U.S. military presence in Central Asia declines but U.S. interests do not, while Kazakhstan responds to China’s growing regional role and strong Russian interest in maintaining Moscow’s primacy in the region. An effective U.S. diplomatic approach toward the region requires reaffirming U.S. support for the political and economic independence of Kazakhstan and its neighbors.

Facing depleting petro-chemical reserves and soaring demands for energy, Pakistan has tough choices to make. It can either risk punitive action by opting for a steady supply of Iranian gas or rely on the more vulnerable but U.S.-backed 1,700 kilometer Turkmenistan-Afghanistan-Pakistan pipeline. Political instability and a lack of a long-term vision over the past two decades have impeded the evolution of both pipeline options, as well as inland and offshore exploration. With a modest forecast of an economic growth rate of 5.5 percent, Pakistan’s energy demand in 2030 may soar to 361.31 Million Tons of Oil Equivalent (MTOE), causing a deficit of 141 MTOE. Hence, Pakistan is increasingly facing an energy emergency.

On February 17-21, Russia conducted its first surprise military inspection exercise in twenty years. The exercise in the Southern and Central Military Districts (MDs) tested combat readiness levels in key formations. These involved the elite Airborne Forces (VDV), Ground Forces brigades, Military Transport Aviation (VTA) and the defense ministry’s 12th Main Directorate. The top brass criticized the performance of officers and soldiers and equipment deficiencies following the exercise, which also revealed the limited power projection options the Russian military possesses in relation to Central Asia.

Kyrgyzstan has made clear that the U.S. must withdraw all of its troops from the Transit Center in Manas when the current lease agreement expires in the summer of 2014. During the ten-plus years of U.S. presence in Afghanistan, the U.S. depended on Central Asian countries, particularly Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan, to funnel military supplies through the Northern Distribution Network into Afghanistan. This led to an increase in U.S. military and political influence in Central Asia. However, with the U.S. withdrawal from Afghanistan and Kyrgyzstan opposing continuing the lease, there are doubts whether the U.S. will retain any influence in Central Asia after 2014.

Starting from February 1, 2013, a ban on purchasing cash in foreign currency was introduced in Uzbekistan. From now on foreign currency banknotes can be obtained only through non-cash operations as a prepayment order on the bank account. On February 4, regional mass media reported that Uzbekistan’s government was ordered to reduce the quantity of imported goods, and to substitute these with locally produced ones. These currency regulations of Uzbekistan’s National Bank could signal an upcoming devaluation of Uzbekistan’s currency. An alternative interpretation is that the measure aims to preserve Uzbekistan’s hard currency reserves and to protect the business interest of local entrepreneurs.