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Russia Could Offer Emergency Aid To Kyrgyzstan

Presidents Bakiev (right) and Medvedev are expected to discuss U.S. use of the Manas air base.
MOSCOW (Reuters) -- Russia could offer hundreds of millions of dollars in emergency aid to Kyrgyzstan and increase pressure on its Central Asian ally to close a U.S. military base.

A Kremlin source said Kyrgyz President Kurmanbek Bakiev had a good chance of securing financial aid during a visit to Moscow for talks with Russian President Dmitry Medvedev.

Kyrgyzstan's economy is in crisis and the small, impoverished former Soviet republic has been holding talks with Moscow on financial assistance.

"Drafts of intergovernment agreements have been prepared under which Russia will offer Kyrgyzstan major credit resources to stabilize the budget and develop key infrastructure sites," the Kremlin source told Reuters. He gave no details.

The Russian newspaper "Kommersant" said Russia could offer a $300 million credit for 40 years at a symbolic annual interest rate of 0.75 percent, provide a nonrefundable $150 million grant, and write off $180 million of Kyrgyz debt, it said.

"For a small state with an annual budget of around $1 billion, such a volume of direct financial aid is unprecedented," "Kommersant" said.

The Kremlin source said military cooperation in Central Asia would also be on the agenda but made no mention of a U.S. air base near the Kyrgyz capital Bishkek, which "Kommersant" said Moscow wanted closed.

The Manas air base was set up with Russia's blessing in 2001, when Kyrgyzstan became a transit point for NATO supplies to troops in Afghanistan, and is an important source of funds for the Kyrgyz budget.

But relations between Moscow and the NATO military alliance have since deteriorated and hit a low after Russia, which also has a military base in Kyrgyzstan, fought a brief war in Georgia last August.

"Kommersant" said Bakiev could announce a commitment to close the U.S. base, a decision that could be an irritant in Russian relations with new U.S. President Barack Obama.

Obama has made clear Afghanistan will be one of his foreign-policy priorities and Russia has sent signals it could contribute to U.S. efforts by allowing the transit by land of nonmilitary NATO supplies through its territory.

Despite the "Kommersant" report, a Bakiev aide said no announcements on the U.S. base were expected.

"We have not made any announcements on this [U.S. air base] and we have no plans to do so," Daniyar Usenov, head of Bakiev's administration, told reporters in Bishkek.

A senior NATO official said during a visit to Kyrgyzstan on February 2 that any decision to close the U.S. air base, home to more than 1,000 military personnel, would be regrettable.

Many Kyrgyz have had mixed feelings about the presence of U.S. troops in their homeland since 2006, when a U.S. airman shot dead a Kyrgyz man in an incident at the base.