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Central Asia Report: February 3, 2006

3 February 2006, Volume 6, Number 4

WEEK AT A GLANCE (23-29 January). Kazakh President Nursultan Nazarbaev met with the country's new government, substantially the same as the old government, to set priorities. He told ministers that they need to modernize the economy, accelerate economic development, and "defend the weak" in the process. Nazarbaev criticized the Finance Ministry for lax fiscal discipline, and newly appointed Finance Minister Natalya Korzhova subsequently pledged to make her ministry more transparent and efficient. Elsewhere, Darigha Nazarbaeva, the president's daughter and head of the Asar Party, laid out a reform program, calling for "concrete mechanisms" for parliament to exercise its powers. She also pointed to a need for greater fiscal control, more responsiveness to journalistic investigations, equal powers for parliament and the cabinet, and more robust political parties.

Ryspek Akmatbaev, reputed to be one of Kyrgyzstan's most powerful mob bosses, was acquitted on multiple murder charges after state prosecutors effectively dropped the case against him. The next day, Prime Minister Feliks Kulov, whom Akmatbaev had accused of complicity in his brother's murder, pointed to the case and harshly criticized National Security Service head Tashtemir Aitbaev for failing to fight organized crime. Aitbaev hit back at Kulov, saying, "I have information on him." Parliament later passed a resolution calling on President Kurmanbek Bakiev to sack Aitbaev. Bakiev refused to do so, citing insufficient evidence against Aitbaev and calling the "verbal duel" between Aitbaev and Kulov "a credit to neither." Elsewhere, Justice Minister Marat Kayipov ordered his ministry to check all NGOs that receive funding from abroad to determine whether any of them threaten the country's national security. The Kyrgyz government presented the United States with a proposal for a new agreement on the U.S. air base in Kyrgyzstan, with reports indicating that the proposal seeks higher lease payments. And Kulov and Aleksei Miller, chief executive of Russia's Gazprom, signed a memorandum of intent to form a Kyrgyz-Russian joint venture for energy-sector projects in Kyrgyzstan. Miller said that the joint venture will involve "hundreds of millions of dollars."

Tajikistan experienced an uneasy week. Gunmen stormed a jail in Tajikistan's Sughd Province, killing the head of the detention facility and freeing at least one prisoner. Tajik law-enforcement sources pointed to the involvement of the Islamic Movement of Uzbekistan, while Kyrgyz officials reported that the fugitives were last seen heading toward Kyrgyzstan. In Dushanbe, Major General Hakimshoh Hafizov, head of the Tajik Defense Ministry's military academy, was shot dead by unidentified gunmen.

Turkmen President Saparmurat Niyazov held a cordial meeting with Russian President Vladimir Putin in Russia. Back home, Niyazov continued to reshuffle his government, sacking Agriculture Minister Begench Atamyradov for "serious deficiencies" and replacing him with Esenmyrat Orazgeldiev, who had been deputy minister. Niyazov also appointed Shemshat Annagylyjova to the vacant post of education minister. Aganiyaz Akiev, formerly the deputy prime minister and head of the president's property department, was released from those posts and named governor of Tashauz Province, replacing Kakamyrad Annaklychev, who faces corruption charges. Akiev's replacement as property manager will be Iklymberdy Paromov, previously first deputy foreign minister. Finally, Toily Komekov was appointed chairman of the State Fishing Committee, while former head Aleksandr Grishin was demoted to deputy chairman.

Uzbekistan formally joined the Eurasian Economic Community (Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan) at a presidential summit in St. Petersburg. Back home, trials continued apace, with Nodira Hidoyatova, coordinator of the opposition Sunshine Coalition, asserting her innocence on the first day of her trial and dispensing with legal representation. She is charged with economic crimes, although her supporters allege that the charges are politically motivated. Bakhtiyor Rahimov, who headed a brief rebellion in the Uzbek city of Qorasuv (Karasu) in May 2005, also went on trial.

TURKMEN GOVERNMENT STEPS UP GAS DIPLOMACY. When Russia and Ukraine quarreled recently over the price of natural gas, the tiff garnered worldwide attention because European gas supplies suffered a brief interruption. But when the two countries brokered a tentative agreement on 4 January, Turkmenistan's role as the supplier of the cheap gas that made the agreement possible drew scant notice. That could be about to change, however, as Turkmen President Saparmurat Niyazov is sending increasingly clear signals that he is looking for ways to enlarge the benefits he reaps from his country's most coveted natural resource.

Turkmenistan currently ships the vast majority of its gas for export to Russia and Ukraine, both of which buy it at bargain prices. Russia's Gazprom is slated to buy 30 billion cubic meters of Turkmen gas at $65 per 1,000 cubic meters in 2006, according to International Oil Daily. The Turkmen gas that will go to Ukraine in 2006 could cost as little as $50 per 1,000 cubic meters, the "Financial Times" reported on 5 January. Meanwhile, prices in Western Europe exceed $200 per 1,000 cubic meters.

Export Routes

The most obvious way for Turkmenistan to get more for its gas would be to diversify its export routes and free itself from the need to send virtually all of its exports to Russia. Lately, President Niyazov has been exploring his options.

On 30 January, Niyazov met with Turkish Ambassador Hakki Akil and U.S. Ambassador Tracey Ann Jacobson in Ashgabat to discuss energy cooperation, reported. According to Turkmen television, Niyazov stressed that his country is considering "all possible routes for bringing its energy resources to international markets bearing in mind increasing global demand." The report noted Turkmenistan's ongoing interest in the construction of a gas pipeline through Afghanistan, adding that the foreign ministers of Afghanistan, Pakistan, and Turkmenistan will soon meet in Ashgabat to discuss the project. The presence of the Turkish envoy at the meeting with Niyazov suggested that a trans-Caspian pipeline to Turkey might have been on the agenda as well, although it received no mention in official reports.

Accelerating Talks

The meeting came amid a quickening tempo of Turkmen energy talks. On 23 January, Niyazov met with Russian President Vladimir Putin. Although Turkmen gas is a crucial component in the rickety resolution of the Russia-Ukraine gas crisis, the meeting appeared to indicate that the Turkmen president was not yet ready to extend price guarantees either to Moscow or Kyiv, "Kommersant" reported on 24 January. While in Russia, Niyazov also met with LUKoil head Vagit Alekperov and Kremlin-friendly oligarch Oleg Deripaska to discuss Russian investments in Turkmenistan, reported. Aleksei Miller, head of state-run Russian gas behemoth Gazprom, is slated to visit Ashgabat in the near future.

Before his Moscow meeting, Niyazov had hosted Zhang Guobao, deputy minister of China's National Development and Reform Commission, to draft a gas-export agreement in preparation for the Turkmen president's planned visit to China this spring. The agreement reportedly calls for Turkmenistan to export 30 billion cubic meters of gas to China a year through a pipeline to be built through Uzbekistan.

Bargaining Chip

The discussion of energy cooperation with the U.S. and Turkish envoys against the backdrop of ongoing talks with other current and potential partners suggests that Turkmenistan's efforts to explore alternative export routes, or at least use the possibility as a bargaining chip in ongoing price talks, are accelerating. Contributing to this impression was a long article that appeared the day after the 30 January meeting on News Central Asia (, an English-language website run by Ashgabat-based Pakistani journalist Tariq Saeedi. News Central Asia's offerings are idiosyncratic, but its stance on Turkmen affairs is pro-government with a particular focus on energy issues.

In a lengthy commentary, Saeedi suggested that the 30 January meeting between Niyazov and the U.S. and Turkish envoys "could possibly be the starting point of a new phase in energy diplomacy." He went on to note that the recent Russian-Ukraine dispute has shown "that you cannot trust Russians." Saeedi then enumerated possible export routes for Central Asian gas: through Russian and Ukraine; through the Caspian (Azerbaijan, Georgia, and Turkey); through Iran and Turkey; and through Afghanistan and Pakistan.

Saeedi commented that the first route -- currently the path most Turkmen gas takes for export -- is problematic because "Russians have proved that they are not reliable partners as far as energy security of Europe is concerned." Saeedi added that Iran "would be a logical route but the present circumstances and the American stance make it a politically indigestible fare." The trans-Caspian pipeline promises certain benefits, but would require the resolution of thorny political and environment problems. Saeedi presented the trans-Afghan pipeline as the most promising alternative export route.

An 'Honest Price'

The most intriguing section of Saeedi's article came at the close in a discussion of an "honest price" for Turkmen gas. Stressing that "Turkmen gas has been used to resolve" the recent crisis between Russia and Ukraine, the author took as a benchmark the $230 that Russia receives per 1,000 cubic meters of gas in Western Europe; he factored in transit charges, set aside 15 percent profit for Gazprom, and then concluded that a fair price for the Turkmen gas that Gazprom sells on to Europe would be $170 per 1,000 cubic meters. He added the caveat that there "may not be any immediate likelihood for Turkmenistan to get this price."

News Central Asia, as the website strains to make clear, is not officially affiliated with the Turkmen government. But its strikingly pro-government stance on major issues suggests at the very least an affinity for official thinking in Ashgabat. As the latest moves by Turkmenistan's mercurial leader indicate, his thoughts seem increasingly to be of ways to increase competition for his country's natural gas and ensure that it commands a higher price. (By Daniel Kimmage. Originally published on 2 February.)

MAJOR CHANGES IN KYRGYZ LAW ENFORCEMENT BEGIN AT TOP. Officials have launched a major overhaul of Kyrgyzstan's law enforcement agencies that includes the departures of at least three senior officials. All three have either offered to resign or have been dismissed since Prime Minister Feliks Kulov on 25 January accused police and security forces of a total failure to combat organized crime and corruption.

The secretary and deputy secretary of Kyrgyzstan's Security Council have submitted their resignations. The head of the Interior Ministry's criminal investigations department has been dismissed. All within a week of Prime Minister Kulov's high-profile statements, prompting many to wonder who might be next.

John MacLeod, a senior editor at the London-based Institute for War and Peace Reporting (IWPR), described what he called the "pessimist's" view of the events in Kyrgyzstan that led to Kulov's outburst.

"In recent month, there has been what pessimists describe as a breakdown of governance. Many of the original revolutionaries from last year think that the president, [Kurmanbek] Bakiev, does not have control over the situation and this lack of control is evident in all sorts of forms," MacLeod said. "You have the recent conflict between the security agencies, which has blown into a huge national scandal and drawn in the Security Council. And you have the emergence of organized criminals, apparently as a political force which interacts with and influences politicians and makes the public very fearful."

Domino Effect?

The situation led Kulov to accuse the National Security Service (SNB) not only of failing to do its job, but also of employing criminals.

Kulov focused on the work of SNB Chairman Tashtemir Aitbaev, but it was the Interior Ministry and Security Council where the first cuts came.

On 30 January, Security Council Secretary Miroslav Niyazov held a news conference to announce that he had tendered his resignation. But Niyazov reportedly did not actually hand in his resignation to President Bakiev.

However, his stated intention to do so followed the resignation of his deputy, Vyacheslav Khan, on 28 January. Khan said at the time that he hoped his resignation would save his boss.

Khan handed in his resignation after legislators accused him of also holding Russian and Kazakh citizenship. Khan denied those allegations, which would violate a constitutional ban on dual citizenship for Kyrgyz nationals.

Then on 31 January, Interior Minister Murat Sutalinov fired the head of Kyrgyzstan's main office for criminal investigations, Baktybek Zhusubaliev. No reason was given.

More To Come

Kumar Bekbolotov, IWPR's country director in Kyrgyzstan, predicts that disagreement and political battles among power organs in Kyrgyzstan have just begun. "These conflicts, or one could say disagreements, between the various power ministries in the government will undoubtedly continue -- that is to say, we will see more of this and possibly even other measures will follow," Bekbolotov said. "Discussion about such sensational issues will continue also because these disagreements were only talked about in parliament and nothing [concrete] came of [those discussions]."

President Bakiev has maintained a low profile throughout the recent bickering. IWPR's Bekbolotov said the president appears to be using the constitutional separation of powers to prevent himself from being drawn into the political fracas.

"[Bakiev] is acting as a separate branch of power that, as regards this scandal, is separated from the executive branch, and is headed by the prime minister," Bekbolotov said. "And inasmuch as Aitbaev is the head of the National Security Service and is part of the government, [Bakiev] looks on this as an internal conflict and gives only a general position that he is sorry about these mutual accusations. But he could more decisively get involved in this situation."

So far, Bakiev has simply said he regrets seeing the problems between members of the government and ministries. (By Bruce Pannier. Originally published on 1 February.)

KYRGYZ PARLIAMENT TAKES UP PREMIER'S CORRUPTION CHALLENGE. Lawmakers in Kyrgyzstan have adopted a resolution calling on the country's chief of national security to step down over doubts about his ability to counter organized crime and corruption. The crisis of confidence was sparked on 25 January when Prime Minister Feliks Kulov warned that lawlessness is undermining stability and tarnishing Kyrgyzstan's international reputation.

Kulov blamed organized crime and corrupt officials, and urged sweeping reforms to clean up the judiciary and law enforcement. He vowed to take personal charge of the battle against corruption, which he said has allowed criminal groups to gain influence in the government. His remarks offended some elements within the government, particularly National Security Service head Tashtemir Aitbaev.

Kulov mentioned Aitbaev by name, and then followed up on 26 January by accusing the National Security Service of ineffectiveness.

"The Security Service needs to be a national security service and not an organization that shelters criminals -- in which there is a criminal," Kulov said. "They should occupy themselves with intelligence and counterintelligence, the greater problems of providing security."

Security Service chief Aitbaev responded angrily in an address to parliament.

"I must defend my honor and dignity," Aitbaev said. "Honorable deputies, let [Kulov] produce one fact. I am ready to answer before you. I'm ready to answer before the president, before anyone. I declare that I have no involvement in...these [illegal] events. Mr. Kulov named as an example [of corruption] Aitbaev, and you know why. He said things against me on the first day he became prime minister. He set the tone. But I believe that I don't need to let bad personal relationships affect the work of the government, and I have never done so."

Charged Atmosphere

Kulov's public barrage followed high-profile events that have prompted concerns about the independence of the courts and the central government's ability to maintain order.

On 24 January, a court acquitted of murder charges a man whom some regard as a criminal kingpin. Kulov said the decision "inflicted a heavy blow to our international image."

The acquitted man, Ryspek Akmatbaev, countered by noting that Kulov was himself jailed for corruption and abuse of office when Askar Akaev was president. Akmatbaev accused the prime minister of pursuing a hidden agenda. "After what Kulov said yesterday, I must say that this is [political] intrigue," Akmatbaev said. "He doesn't even know what he is talking about because all of us know how he worked before under Akaev."

Regional Challenge

The central government has also had to confront challenges at the regional level. Last week, the governor of the southern Jalal-Abad Province defied a presidential transfer to another province, and his supporters staged a series of protests. The governor eventually flew to Bishkek to meet with President Kurmanbek Bakiev -- and afterward claimed political victory.

Lawmaker Melis Eshimkanov told RFE/RL that -- in the light of recent events -- Kulov's comments were hardly surprising. He also said he tended to agree. "It wasn't unexpected for me at all, because our society wants to know Feliks Kulov's opinion on recent events," Eshimkanov said. "There are dismissed governors in the Talas and Jalal-Abad regions continuing their work, yesterday a Security Service officer [who was] arrested with weapons and drugs in his possession was freed, and other events show that the postrevolutionary situation in Kyrgyzstan is still very unstable."

Perceived Insecurity

Independent political analyst Toktagul Kakchekeev conceded Kulov's general argument. He was blunt in his criticism of the National Security Service, saying it has failed to combat crime and is now hindering his efforts to fight criminal organizations.

"Because the National Security Service is directly under the control of the president, they do what they want and do not do those things for which they have no desire," Kakchekeev said. "They are like a spoiled child. They are responsible for the alarming situation in the country. From Kulov's statement, I understood that he cannot exercise his authority and he needed to say these things openly to the public."

President Bakiev vowed to eliminate corruption and criminal influence in politics when he was campaigning for president in mid-2005.

Tired of waiting for stronger action from the office of the president, Prime Minister Kulov appears to be seizing the political initiative. The 26 January parliamentary vote suggests he has some support. (By Bruce Pannier. Originally published on 26 January.)

SWISS GOVERNMENT SPOKESWOMAN EXPLAINS ARMS BAN ON UZBEKISTAN. Switzerland has formally imposed an arms embargo on Uzbekistan in response to alleged human rights violations that occurred in May in the Uzbek city of Andijon, where hundreds of people were believed killed by security forces. The Swiss have also imposed travel restrictions on 12 senior officials thought to be implicated in the Andijon crackdown. Bern's move follows similar action by the 25-member European Union in November. Alisher Sidikov of RFE/RL's Uzbek Service spoke on 1 February with Rita Baldegger, a spokeswoman for the Swiss State Secretariat for Economic Affairs, who explained details of the measures.

RFE/RL: I understand that Switzerland quickly imposed preliminary bans on Uzbekistan, and now it is formalizing these restrictions?

Rita Baldegger: Correct. Now they are official sanctions in line with the European Union. But we also have to say that although we are now imposing these sanctions, we will continue to monitor the developments in Uzbekistan, and adjust our measures accordingly. These sanctions do not mean that our relationship with Uzbekistan is indefinitely harmed, it just means that we want to uphold human rights, civil rights -- that's very important for us -- but also of course, as the situation in Uzbekistan improves, we will reconsider our actions.

RFE/RL: What will be the impact of the Swiss ban, in so far as Switzerland is a financial center of the world?

Baldegger: Sanctions can have an impact if they are widely applied. The EU has already imposed sanctions, and now we are joining them. So the countries involved in imposing sanctions on Uzbekistan are quite big in number; the more countries that are involved in imposing sanctions, the greater the impact will be. What our sanctions do is to impose a ban on the supply of military equipment to Uzbekistan, or goods for the purpose of internal repression; also a ban on financial services in connection with the supply of defense goods and with military activities; so this is actually a measure to protect the Uzbek people. We are very strongly against internal oppression, and this is a way of showing that, and of course hopefully a way of making the government think about its actions.

RFE/RL: What is the economic relationship between Switzerland and Uzbekistan that could be affected. Will Uzbek government accounts be affected?

Baldegger: We have several agreements with Uzbekistan. We exported goods worth 27 million Swiss francs to Uzbekistan ($13 million), and imported goods worth 1.6 million francs ($900,000). We have some Swiss companies operating in Uzbekistan, but the business interests of Swiss companies in Uzbekistan is not extremely big.

RFE/RL: Other Swiss-Uzbek cooperation will be sustained?

Baldegger: These measures should not have impact on normal business activities, since they are concentrated on defense goods, on financial services for defense goods and military weaponry, and also some travel restrictions for some individuals. So it is really centered on the events in Andijon last year.

RFE/RL: You are imposing a travel ban on 12 people. If these people have some private accounts in Swiss banks, will this travel ban prevent them from reaching their accounts in Switzerland?

Baldegger: Of course, they will be hindered from coming personally to Switzerland, this definitely yes. If they want to come personally, that would be prevented; it would not be possible. They cannot enter or transit Switzerland.

RFE/RL: Do you think these measures will be followed by other steps, financial steps, like reviewing the accounts of Uzbek officials. Is it possible?

Baldegger: Theoretically all kinds of sanctions are possible. I mean financial sanctions are also possible, but at the moment I am not aware of more sanctions being imposed, and I cannot say more, because this would be a decision of the Swiss Federal Council. (Originally published on 1 February.)