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Turkmenistan: Did Costs Outweigh Benefits Of President's U.S. Visit?

Boston, 5 May 1998 (RFE/RL) -- As Turkmenistan President Saparmurat Niyazov returned from his visit to the United States, there were reasons to question whether the benefits of the trip were outweighed by the diplomatic costs.

Niyazov succeeded in signing some deals with U.S. oil companies, yet these fell far short of the flurry of contracts landed by Azerbaijan President Heydar Aliyev during his Washington visit last July. Some larger Caspian offshore deals are still in the works for Turkmenistan, but these have been subject to continual delay.

It is not yet clear how much trade will result from a cooperation agreement with the U.S. Export-Import Bank and a memorandum of understanding on technical assistance from the U.S. Agency for International Development. But neither of these can be considered major breakthroughs.

Officials pointed to a $750,000 feasibility study of a trans-Caspian pipeline authorized by the U.S. Trade and Development Agency. But in fact, the agency routinely funds such studies as a way of promoting U.S. trade and services, while determined developers are perfectly capable of undertaking studies on their own.

Added to these modest gains was the more intangible, and potentially more important, benefit of appearing before U.S. audiences, showing that the promise of Turkmenistan's resources can bring together a potent combination of oil companies and top officials, just like Azerbaijan and Kazakhstan.

But consider the costs. Niyazov's human rights record won a hostile reception from the U.S. press, as both The Washington Post and The New York Times criticized his reception at the White House. Niyazov reacted badly, refusing to bow to U.S. demands or to be held up to western standards of democracy. U.S. officials tried to minimize the damage but the harsh image of Niyazov is likely to last in Washington for years.

Niyazov may also have failed strategically on two fronts at once. Although he won a concession from the United States to respect Turkmenistan's neutrality in the American dispute with Iran, Niyazov apparently angered his neighbor Iran with his planned support for a trans-Caspian pipeline. Tehran voiced its displeasure during the Niyazov visit in a strongly-worded statement by Foreign Minister Kamal Kharrazi, who blasted any Caspian Sea development without the consent of all five littoral states.

Trans-Caspian lines would have obvious disadvantages for Iran because they would bypass Iranian territory. Although they would be extremely expensive, they would allow oil and gas to flow from the Caspian and Central Asia to Turkey and the West with no benefit at all to Iran. They could even raise the price of future Turkmen gas sales to Iran if Turkmenistan succeeds in finding better markets for its gas outside the region.

The Iranian statement can only be viewed as a setback for Niyazov who may now find that he has some explaining to do. In fact, his support for the trans-Caspian line means little because the costly project is unlikely ever to take place. But he might at least have smoothed the way with assurances to the Iranians to avoid discord with the only country which is currently buying Turkmen gas. If there was any such diplomatic effort, it apparently failed to avoid an open conflict.

In fact, Niyazov has remained adamant about keeping Turkmenistan's options open, telling U.S. officials that he will sell gas to Turkey either by a line across the Caspian or through Iran, depending on which can be built first.

On the second strategic front, it seems clear that a primary reason for Niyazov to support a trans-Caspian line is to influence Russia, which has refused to carry Turkmen gas to Europe at a reasonable price for over a year.

While a trans-Caspian pipeline would bypass Iran, it would also avoid Russia, giving Niyazov a way to pressure Moscow on offering him better terms. If the new Russian government moves quickly to reopen talks with Turkmenistan on gas sales, it will mean that Niyazov's ploy has worked. If no talks take place, it will mean that the effort was wasted and that the Russians have reasoned that they can bide their time.

In fact, time is on Russia's side. Although a trans-Caspian line may represent a competitive threat, it has yet to be built, while Russia has existing pipelines that are ready to be opened at a moment's notice if the challenge of a Caspian route materializes.

Russia's ability to compete by simply reopening its access to Turkmenistan may be enough to stall financing for any trans-Caspian gas project. Washington might ultimately be willing to back its political agenda in the region with subsidies for its preferred route (although it says now it won't). But Moscow seems likely to play this game as long as possible, delaying Turkmen gas sales though Russian lines until a competitive trans-Caspian pipeline project is actually set to begin.

In the meantime, Turkmenistan's choices for the near term seem to be as limited as they were before the visit. It will have to make its explanations to Iran and try to sell it as much gas as it can.