On February 22nd, in what the Financial Times characterized as “Central Asia’s gradual shift from Moscow and towards Beijing,” China drastically expanded its investment in Kazakhstan. Not only in oil, but in a broad range of areas including water, uranium, and transit infrastructure worth billions of dollars. The rapidly increasing level of Chinese investment in Central Asia is not news, nor is the commonly noted decline of Russian influence in the region, but its geopolitical implications and the future trajectory of development in Central Asia continue to be hotly debated. Perhaps no phrase could be more anachronistic today, and less insightful, than attempting to describe current politics in the region as a renewal of the Great Game. If anything, the modern story of Central Asia is one where Central Asian states and local elites are increasing integration with the rest of the continent and beyond through policies that diversify economic ties and balance the influence of major powers, creating leverage and options for themselves.
Russia, China, and the U.S. have been competing for investment, particularly access to energy resources. However, they all have common interests in maintaining regional stability, countering narcotics trafficking and terrorism along with improving the overall regional capacity for trade. Central Asian states themselves have emerged as the arbiters of their fate. Having remained independent despite Russian efforts to bring them back into the fold, some have made considerable economic progress by leveraging vast energy resources, but this development has remained highly uneven. Political reform has been negligible since the collapse of the USSR. Most countries are still ruled by strongmen intending to stay in power for life through skillful use of rigged elections and navigation of elite- or clan-based politics. Governments remain corrupt, inefficient and nepotistic. They continue to muddle through with weak economies and poor regional economic integration. Significant ethnic tensions and a disenfranchised population loom just below the surface of stability; a rapid flare of political unrest, as in Kyrgyzstan last year, remains a real concern. This order will prove particularly fragile during times of leadership transition in the future.
China is quickly becoming the most significant player in the region, and not just through energy deals. Having built pipelines for the transit of oil with Kazakhstan, and with Uzbekistan and Turkmenistan for the transit of Turkmen gas, it has made itself a lucrative alternative market to Russia. China’s investment is steadily expanding to other economic sectors. It is becoming the second largest import-export market for Central Asian states, eroding Russian dominance across the region. However, its main source of influence has come from billions of dollars in loans through Chinese state banks to Central Asian states, dwarfing investment and aid from the US and Western institutions like the World Bank. In time, these loans could drastically change long established industry relationships in the region, which were traditionally with Russia, and shift them towards China, while also removing any incentive for internal reforms. Chinese loans come with no economic or domestic political strings attached, but further promote the steady introduction of Chinese products and labor into the region.
China’s interests are not economic alone, as it seeks to secure what it sees as a fragile region on its border, and warily observes the large U.S. force presence in Afghanistan since 2001. It has a right to be concerned given the growth of criminal networks, drug trafficking and continued presence of militant groups (like the Islamic Movement of Uzbekistan) in Central Asian states. Occasional outbreaks of ethnic tensions since the 1990s have been a worrisome pattern, in part because they can draw in interventions from other states, which would further destabilize the region or alter existing relationships. Instability caused by the ongoing U.S. war in Afghanistan is another serious cause for concern, as is the potential for further volatility in the region once the U.S. military departs. If the ISAF mission in Afghanistan proves unsuccessful, Islamic radicalism, financed by the drug trade, could spread throughout the region. China has always been wary of its own Uighur Muslim minority and the possibility of it becoming radicalized. The Shanghai Cooperation Organization (SCO) is one vehicle through which China seeks to address these issues.
However, while China’s policy in the region appears focused and increasingly influential, it is not seeking to dominate the region and is not playing a military role in Afghanistan. Central Asian elites, for their part, have been happy to diversify their connections and market opportunities, leveraging China against Russia, and reaping the economic benefits. But they have no interest in becoming a backyard resource mine for China any more than they wish to return to being Russia’s zone of special influence. If anything, they are already becoming mindful of China’s growing influence. China itself is concerned that too much direct political involvement would prompt Russia towards a greater focus on Central Asia, where it is still a powerful actor. If anything, China is seeking to establish a new status quo that maintains a balance of interests between itself and Russia while allowing Central Asian states to remain independent—and of course, keeps U.S. presence to a minimum.
Russia has watched its power wane with apprehension, but retains strong institutional and cultural connections with both elites and the people. Its role as the primary purchaser and transit country for energy from Turkmenistan and Kazakhstan still gives it considerable influence, as does its security presence in the region. Having demonstrated the will to act militarily in Georgia, and thoughtful restraint in Kyrgyzstan, Russia is still viewed as the predominant regional power when it comes to security. Mindful of China’s growing power, Russia has sought to strengthen its ties through regional economic and security unions, including not just the SCO but also the Collective Security Treaty Organization, and to work with China to ensure a measure of stability. This policy may change if the Chinese presence becomes dominant enough to deny Russia access to key energy resources. For now Russia, too, is content with a balance of economic competition and security cooperation. Russia and China do not wish to affect their broader relations by overplaying their hands in Central Asia.
The Russian perspective on the U.S. presence is quite different. Russia has had mixed views on the large US military presence in Afghanistan, and American attempts to establish influence in Central Asian states. It first sought to undermine these efforts, viewing them as yet another American attempt to extend influence into every corner of former Soviet space. This was most visible in the problems America had in maintaining access to the Manas airbase in Kyrgyzstan and to K2 in Uzbekistan, along with various propaganda campaigns against U.S. civil society building efforts in Central Asia. However, as worrisome as the American presence has been, Russia has sought to control and leverage it on other issues in U.S.-Russia relations that it considers more important. Russia has signed transit agreements for U.S. military goods to Afghanistan, and while it resents the current NATO presence there, the prospects of an American departure are even more worrisome. Russia has witnessed a surge in drug addiction, crime and drug trafficking whose roots lie in Afghan drug production. Already struggling for decades with terrorism and insurgencies in the North Caucasus, it is equally worried about radicalization spreading through Central Asia and affecting its own growing Muslim population if the NATO mission fails in Afghanistan.
American engagement in the region since the 1990s has been inherently disadvantaged by geography compared to Chinese and Russian efforts and equally constrained by what can at best be described as an economy of force approach with very limited goals. On the other hand, the United States is seen as a booster of the sovereignty of Central Asian states. Its lack of proximity is an advantage to the extent that it lends credibility to U.S. claims to harbor no territorial ambitions (in contrast to very real Central Asian concerns about Russian and Chinese aims). A distant newcomer to Central Asia, the United States had sought to make inroads in developing energy routes towards the Caspian and promoting political reform efforts by building up civil society and pushing the autocratic elite towards democratization. Yet both of these efforts have collided with unexpected realities.
Years of work on diversifying transit infrastructure toward the West in order to break the Russian monopoly have thus far only resulted in a BTC pipeline with minor Kazakh involvement. Instead, the major new pipeline agreements are going to China. Zealous democratization and political reform efforts have been slow-rolled by Central Asia’s authoritarian political culture, and in some cases have produced a backlash as dictators react to the risk of “color” revolutions. Central Asian governments are as autocratic as ever, and while support is voiced for real democratic institutions, their formation is unlikely to take place in a timeframe that responds to Western desires. Even generational change in leadership, as in Turkmenistan, is not a guarantee of a more democratic approach. Meanwhile, Chinese loans without reform requirements have completely overshadowed previous American investments.
America has not pursued a comprehensive regional policy toward Central Asia. Reflecting the diverse nature of the Central Asian states themselves, the United States has stressed limited instrumental engagement, with a laser focus on logistics for its forces in Afghanistan and a patchwork effort on democratic reform and human rights. To some regional observers, the U.S. approach appears to be single minded, easily constrained by China and Russia, and continues to miss any opportunities to push forward developments in the region that could positively affect the future stability of Afghanistan and conflict resolution. To others, getting Afghanistan right is the key to stability, prosperity and ultimately democratic reform in the region. In many respects, even transactional relationships have been under-resourced by the woeful lack of official and diplomatic engagement. The U.S. Ambassador to Turkmenistan was only recently confirmed after a four year hiatus, and there has been no American Ambassador in Uzbekistan since last July. This has often left U.S. interests at the mercy of little understood clan-based politics and other regional powers, in a part of the world where ambassadors are held in unique esteem.
However, this criticism must be viewed from a realistic and strategic perspective. In truth, America has no urgent or vital interests in Central Asia other than in Afghanistan, and no cultural ties or shared political values exist with governments in the region. It has remained engaged on common interests, particularly security and energy, and it has articulated a vision of commercial corridors that link the resources of Central Asia with the teeming markets and ports of South Asia. But the U.S. has eschewed a serious economic presence given its considerable disadvantage vis-à-vis Russia and China. Despite a lack of resources and representation, American initiatives and programs designed to improve trade and private sector opportunities have had some success. More importantly, its vision to see Central Asia remain independent, better integrated with the rest of the continent and free from the domination of major regional powers, has largely come to fruition. The Central Asian balancing act between China and Russia continues to yield benefits for American interests in the region, if not its values.
America is not entirely on the sidelines, and can still play an important role, particularly if it chooses to increase engagement with local governments on a regional plan to stabilize and eventually withdraw from Afghanistan. Countries in Central Asia and South Asia continue to seek reassurance about continued American attention and presence in the region following a prospective withdrawal of American forces from Afghanistan. While Central Asian states look to the main engines of growth and investment around them—China and India—they will also seek American technical expertise and private enterprise to develop their own economies, along with American assistance as a key player in the international arena. Diminishing U.S. foreign aid and investment resources will reduce the tools available to U.S. policymakers. However, smart policies aimed at working together on common security and economic interests combined with the desire of Central Asian states to remain independent from outside influence could ensure a long term U.S. role.
Michael Kofman is Program Manager at the Center for Strategic Research at National Defense University’s Institute for National Strategic Studies. The views expressed are his own and do not reflect the official policy or position of the National Defense University, the Department of Defense, or the U.S. government. Kofman thanks the Center for the Study of Chinese Military Affairs for their research contribution to the piece.
Publisher’s Note: The article was originally published in the print summer 2011 edition of the Diplomatic Courier magazine as the Cover Story.