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Kazakhstan

Central Asia: Strapped For Energy Resources, China And India Look For Alternatives

The impressive economic growth of both India and China has intensified their interest in Central Asia's energy resources. That's the view of two U.S. experts who spoke about the India-China relationship and their emerging ties to Central Asia this week during a panel discussion at the New York-based Asia Society.

By Nikola Krastev
New York, 22 April 2004 (RFE/RL) -- Winston Lord, the co-chairman of the International Rescue Committee and a former U.S. ambassador to China, is convinced that China -- and possibly India, too -- increasingly will be looking to Central Asia to satisfy its growing energy needs.

"Central Asia being where it is, physically, is obviously an attractive area for both countries. So it's a potential source."
Speaking at a recent meeting of the New York-based Asia Society, Lord said China especially is emerging as a strong actor in Central Asia. "There's no question that both India and China have strong energy needs and as their economies grow they are consuming more and more energy," he said. "And Central Asia being where it is, physically, is obviously an attractive area for both countries. So it's a potential source. I know that China's working very hard in this, but I'm not familiar with what India is doing in that region to be honest. It is a potential source of [possible] cooperation, a multinational project or could be a competition, but I just don't know about what India is up to."

China has already begun multibillion-dollar energy projects in Central Asia, including construction of an oil pipeline from Kazakhstan that will bring crude oil some 3,000 kilometers to Dushanzi City in the Xinjiang autonomous region.

Lord told RFE/RL that China, seeing its own domestic energy resources depleting, has been positioning itself to exert more influence in Central Asia. "China has made a major effort to diversify its energy resources," he said. "It was up until few years ago almost self-sufficient, but now with the exhausting of its own reserves and a huge economic growth it has become the world's second-largest energy importer after the United States. This is going to have implications, of course, for Central Asia, where they formed this Shanghai Cooperative Group with Russia and the various Central Asian countries, so they want to have influence there."

Kazakhstan is competing with Russia to supply China's energy needs. But Lord said in his opinion, both countries are likely to succeed given China's enormous energy needs.

Panelists said trying to assess India's influence on the Central Asian energy market is more difficult. Frank G. Wisner, the vice chairman of the American International Group and a former U.S. ambassador to India, said India has always had its eyes on Central Asian energy resources, but that geographic and political barriers prevent easy access to them. Transporting oil and gas would be difficult through unstable areas of Afghanistan and Pakistan.

"India's always had her eyes on Central Asian gas and petroleum resources,” Wisner said. “But actually getting those to India are more complicated than most other energy sources that India can tap. India has much easier access to gas from Qatar or from Indonesia, petroleum products from the Middle East. In the short run, short to medium term, India will be more energy dependent on Southeast Asia and on the Middle East than it will be on Central Asia."

Asked whether logistical complications mean that India will continue to keep a low profile in Central Asia's energy contest, Wisner said for cultural and other reasons, India will always maintain a strong diplomatic presence to be able to exploit opportunities if they arise.

The panelists said they see a change in the psychology of Indian leaders. Increasingly, the panelists said, India sees itself as a great power -- on equal footing with China. India is also demanding permanent member status on the UN Security Council, a privilege China has had for more than 30 years.

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