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Qishloq Ovozi

A Chinese worker walks along the Kazakh stretch of a pipeline linking China and Turkmenistan.

China’s massive One Belt, One Road (OBOR) project aims to connect the world like never before, using land and sea routes to form trade links across Asia and Europe and down to Africa. It’s an extremely ambitious project that will take many years to realize but already OBOR has many people excited about the economic possibilities to come.

Among the billions of people who could benefit immensely from OBOR are the roughly 65 million residents of Central Asia. But being part of OBOR is not necessarily a guarantee for a better future.

To look at OBOR in Central Asia, and some of the potential advantages and disadvantages, RFE/RL assembled a Majlis, or panel, to review the situation.

Moderating the discussion was RFE/RL Media Relations Manager Muhammad Tahir. From Exeter University in the U.K., senior lecturer and Central Asian expert David Lewis joined the discussion. From Geneva, journalist, researcher, and native of Kyrgyzstan Cholpon Orozobekova, who has written for the Jamestown Foundation and The Diplomat took part. I was just back from Washington, New York, and the CESS conference at Princeton and was raring to go, so I pitched in a few comments also.

As Lewis mentioned at the start of the Majlis, the numbers for OBOR are genuinely unprecedented -- $1 trillion of investment with routes potentially reaching some 44 countries with more than half the population of the planet. And, as Lewis pointed out, “This being the initiative of [Chinese President] Xi Jinping, it’s something that the Chinese leadership is committed to and it does involve significant funding for Central Asia in particular, and of course, governments, at least in Central Asia, are very enthusiastic about funding flowing into major infrastructure projects.”

OBOR has already started in Central Asia. Lewis recalled the oil pipeline from Kazakhstan, the natural gas pipelines from Turkmenistan, and a road network from Kyrgyzstan and Tajikistan already lead to China.

These projects and others were started, and some completed, before the autumn of 2013 when Beijing first articulated the OBOR project. As Orozobekova reminded, “In 2013, trade between China and the five Central Asian states was $50 billion already, while, for example, trade between Russia and these [Central Asian] countries was only $30 billion.”

That trend has only become stronger as Russia’s economy has weakened, limiting Russian investment potential. China, meanwhile, has continued to vigorously pursue OBOR. In February this year, the first cargo train from China arrived in Iran after passing through Kazakhstan and Turkmenistan along new railways in the latter two countries. In September, the first train from China to Afghanistan arrived after crossing through Kazakhstan and Uzbekistan.

According to the plan, the part of the route that runs through Central Asia should continue west through northern Iran into Turkey. Central Asia could benefit greatly from this new route for shipping goods to, and receiving goods from countries with access to the Persian Gulf and the Mediterranean Sea.

But already parts of Central Asia are seeing some of the negative aspects that come with these Chinese-funded projects.

“In Central Asia there are some concerns regarding the flow of migrants from China,” Lewis said. He explained: “Typically Chinese companies like to use their own people, bring in Chinese labor to get a job done. It’s often very effective but it doesn’t always give people local jobs and employ local specialists.”

That has led to problems in the oil fields of western Kazakhstan where Chinese employees work, in mining areas in Kyrgyzstan where Chinese employees work, and along various parts of the roads being constructed in Kyrgyzstan and Tajikistan where locals work alongside Chinese workers. Sometimes the problems are caused by rumors of the Chinese receiving better wages, sometimes the lack of the locals’ ability to communicate with the Chinese workers has led to fights.

Chinese farmers are also tending agricultural land in Tajikistan vacated by local farmers who left to find work in Russia. A proposal to lease farmland in Kazakhstan earlier this year sparked the largest protests seen there in some 20 years, when rumors spread that Chinese farmers would lease portions of Kazakhstan’s farmland.

Orozobekova said, “In Central Asia there are some concerns regarding the flow of migrants from China.”

Additionally, while Chinese workers are coming to Central Asia, Lewis said, “China just doesn’t offer that kind of labor migration, there’s no real option to go to China to work.” So Central Asia’s migrant laborers continue to mainly go to Russia.

And there are also environmental concerns. Chinese companies do not have a good track record when it comes to ecological considerations. Lewis explained, “In Kyrgyzstan and in Tajikistan recently, new cement plants developed by China are notoriously polluting industries and can have a really negative effect on local people.” Refineries in Kyrgyzstan and Tajikistan built or operated by Chinese companies have also received complaints from local administrations and residents.

Orozobekova also pointed out for Kyrgyzstan, OBOR is a competitor project. She said many in Kyrgyzstan “are overwhelmed with the EEU, the Eurasian Economic Union.” The EEU is the Russian-led organization that also includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Kyrgyzstan officially joined in August 2015. Orozobekova said, “When it comes to OBOR and the EEU there’s a little bit of a clash between them because currently, Kyrgyzstan and Kazakhstan joined the EEU with Russia [and] there are so many problems within this organization [EEU].”

And Orozobekova reminded that since 1998, Kyrgyzstan is also a member of the World Trade Organization, so officials in Bishkek must do some furious juggling to try to simultaneously meet the regulations of all these organizations.

And Lewis noted, “We know there’s a slowdown going on in the Chinese economy and so these very ambitious plans, which require a lot of funding, may be more difficult than was considered.”

OBOR is a thick topic, and one the Majlis will address again in the near future. Participants in this latest Majlis session explored more deeply the benefits and detriments of being one of the first sections of OBOR, including potential security problems, now and in the future.

An audio recording of the discussion can be heard at:

Majlis Podcast: What’s China’s One Belt, One Road Project To Central Asia?
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A man walks in front of oil derricks on the Caspian Sea near the Azerbaijani capital Baku.

The Caspian seabed contains some of the largest reserves of oil and natural gas in the world. And if one adds the hydrocarbon wealth present onshore in the Caspian littoral countries -- Azerbaijan, Kazakhstan, Turkmenistan, Iran, and Russia -- the volumes are staggering.

However, to send energy resources from the Caspian Basin to world markets requires cooperation and with all five countries hoping to export their oil and gas it is not surprising that agreement is often difficult to reach. The politics of Caspian energy exports is complicated and there is a good deal of hypocrisy involved.

To examine the Caspian conundrum, RFE/RL assembled a Majlis, or panel, to discuss the politics of the region, who is exporting, who is not, and why this is so.

Moderating the discussion was RFE/RL Media Relations Manager Muhammad Tahir. From Carlton University in Ottawa, Canada, energy expert Robert Cutler joined the discussion. From Britain, independent journalist, former deputy director of RFE/RL’s Iranian service (Radio Farda) Hossein Aryan also took part. Participating from Washington was Luke Coffey, the director of the Allison Center for Foreign Policy Studies at The Heritage Foundation. And I was in New York City from where I contributed a few comments of my own.

The Caspian littoral states’ working group held a session in Tehran on October 23-24. It was the 47th session of the working group over the course of some 20 years and, once again, delegates left the meeting with little to show, vowing to meet again soon.

Sea Or Lake?

The main sticking point remains the legal statues of the Caspian Sea. Is it a sea or a lake? It makes a big difference, particularly for Iran as Coffey explained.

“Iran is dead set on the Caspian Sea [being declared] a lake because under the terms of the law of the Sea they would only get about 13 percent of the water whereas [if it were declared a lake] they want an equitable 20 percent,” he said.

That is not just 20 percent of the water and seabed, it is a 20-percent share in the riches of the Caspian Sea.

Coffey added that the portion of the Caspian that is in Iran’s sector “is the deepest, I think it holds almost two-thirds of the volume of the water in the Caspian, so in terms of extracting oil and gas resources it’s very difficult.”

Technically none of the countries should be developing oil and gas fields until all five states agree on the legal status of the Caspian.

But, as Aryan pointed out, “68 or 70 percent of the Caspian has already been divided, between Russia, between Kazakhstan, between Azerbaijan, and also between Turkmenistan and Kazakhstan, so it only leaves something like 30%, which is [in the area of] Iran, Azerbaijan, and Turkmenistan.”

And there is a lot of extraction already taking place.Azerbaijan’s Shah Deniz 1 project has been supplying oil to the Baku-Tbilisi-Ceyhan [BTC] pipeline, which has been carrying that oil to Turkey’s Mediterranean coast for export for some 10 years now.

Artificial islands at the Kashagan offshore oil field in the Caspian Sea. Kazakhstan only recently restarted production in this field in October after it had been shut down when undersea pipes cracked and leaked into the surrounding water.
Artificial islands at the Kashagan offshore oil field in the Caspian Sea. Kazakhstan only recently restarted production in this field in October after it had been shut down when undersea pipes cracked and leaked into the surrounding water.

Joint Ventures

Other littoral countries have been developing their offshore sites also. And Cutler noted, “As part of the Russian-Kazakh agreements for the division of their mutual boundaries… the two countries have cooperated and continue to cooperate on a number of joint ventures to exploit deposits that are on, or near the boundary of that so-called modified median line in the Caspian offshore.”

This sort of cooperation is apparently not possible for all the Caspian littoral countries.

Azerbaijan and Turkmenistan have for around two decades been discussing the construction of an undersea pipeline to bring some 30 billion cubic meters of Turkmen gas annually across the Caspian where it could be loaded into pipelines heading to Turkey and on to Europe. The Trans-Caspian Pipeline (TCP) is included as part of the European Union’s Southern Corridor strategy to diversify its gas import markets in order to avoid becoming overly dependent on supplies of oil and gas from Russia.

Iran and Russia oppose this project, ostensibly because of environmental concerns.

Cutler pointed out, “When Russia built the Blue Stream pipeline under the Black Sea to Turkey and when it talks about the Turkish Stream pipeline, nobody, and not Russia, really discusses the environmental and ecological issues which seem to come to the fore rhetorically when Caspian affairs are the subject of discussion.”

And Cutler added, “There’s so much more experience with constructing and managing these sorts of pipelines in the last 20 years that it really shouldn’t be an issue and it is not a technical issue, it is a political issue.”

Russia’s Interests

Coffey echoed that saying, “It’s in Russia’s interests that this matter [the legal status of the Caspian] remains unsettled. This makes it more difficult for the Trans-Caspian Pipeline to ever be realized and it means that there’s one less alternative available to Europe that bypasses Russia.”

Underscoring the point that it is only the TCP that raises objections, Cutler drew attention to “an oil pipeline between Kazakhstan and Azerbaijan, which they’ve been discussing for 10 years and which they again recently, just last month signed yet another accord for the intention to build.”

So far, none of the other Caspian states have raised any objections to that proposed pipeline, nor did any of them complain when Kazakhstan’s offshore Kashagan field started production in September 2013 only to be quickly shut down when the undersea pipes cracked and leaked into the Caspian Sea. After replacing those pipes, Kashagan just restarted production in October.

In the absence of any common agreement on the Caspian’s status there is really only one thing that counts, as Aryan, who served for some 18 years in Iran’s navy explained. “Russia has the largest navy, nearly 150 vessels, most of the exercises and drills conducted by Russia in the Caspian Sea are far beyond the agreements reached between the states with regard to maintaining security, fighting smugglers, search and rescue.”

That includes firing cruise missiles from Russian ships in the Caspian Sea at targets inside Syria earlier this year, a move that was not necessary from a military point of view, but one that sent a message to the other littoral states about who is ultimately in charge of the Caspian Sea.

This was an intense discussion that covered these topics in greater detail and addressed other issues on the complicated situation in the Caspian:

An audio recording of the Majlis can be heard here:

Majlis Podcast: The Politics Of Caspian Energy
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About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change.

Bruce Pannier
Bruce Pannier

Content draws on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad.

The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.

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