Chapter 7

Russia's Foreign Policy in Central Asia and the Caucasus

by Alexander Akimov, Sergei Lounev & Glerii Shirokov

The problem of Russia's territorial integrity since the collapse of the Soviet Union has been especially relevant to the conduct of its foreign and economic policy. This is particularly true for the period from 1992-93. It was complicated by the specific nature of Russia's domestic policy, which included appeals for support from conflicting branches of power to autonomous regions (or in the language often used, appeals from the "center" to the "periphery").

In the Republic of Kazakhstan, a similar situation also exists, and has the possibility of worsening. Logically the idea of a "Eurasian Union" proposed by Kazakhstan's President Nursultan Nazarbaev, with its ideal of "maximum economic integration with the preservation of political independence," reflects the growing alarm of the republic's ruling circles over the disintegrational tendencies in Kazakh society. These tendencies, burdened by fluctuations in domestic political competition, are objective in character, since they are largely enhanced by factors of structural origin. These factors include the existence of various socio-cultural traditions in the north and south of Kazakhstan, which result in a specific outlook for each region, such as: mentality, political culture and consciousness, models of behavior and motivation, and the coexistence of the various systems of economic forces that are developing according to internal structures and are oriented toward their own principles of economic integration.

Disintegration of the USSR and Russia's Policy Toward the Former Soviet Republics

Since the end of the 1980s, Russia has considered itself to be part of the West. A substantial majority of the population bases their world-view on the assumption that Russia is a historically European civilization, a view that affects the Russian Federation's foreign policy. Russian reformers in the post-Soviet period speak out in favor of a quick transformation of Russia into a "civil law" state and encourage the creation of a "civil society," perhaps naively not realizing that the process takes decades to complete. Accelerated movement toward a market economy has also been encouraged by post-Soviet Russian reformers. In the area of foreign policy, the Russian population reacted with relative calm with regard to Russia's loss of superpower status and the towering geopolitical role it played as the Soviet Union.

In general, the Russian population supported the development of ties with Europe and the United States concurrent with a distancing from those of Asia, and did not see any particular reason for strengthening ties with the Central Asian republics, viewing them as "civilizational ballast." This view was accepted by many Russians who gave consideration to the level of economic development and the social, cultural and religious (Islamic) views held by many in the republics. Western civilization was perceived as the ideal form and final goal of Russian development.

The breakup of the Soviet Union freed Russia from the excessive financial burden of supporting the other republics (by the end of the 1980s the Russian Federation's subsidies to the other 14 republics exceeded 50 billion dollars per year). According to the Institute of Economic Prognosis, the system of economic relations between the republics of the USSR included the transfer of 6.6 percent of Russia's national income outside its borders. At the same time, Uzbekistan received 25 percent of its total budget in subsidies, Kazakhstan 28 percent.

Russia hoped to use its industrial, scientific and technological potential in order to speed up its own economic development. At the same time, the country wanted to avoid traditionalist influences on social and political processes and speed up the transition to an "open" political system and a "civil law" state. This is why the idea of "entering the European home" was officially approved. It is precisely these principles that formed the basis of Russia's foreign policy in 1992-1993. However, as reality quickly became more complicated, Russian foreign policy began to fluctuate. Economic, political and psychological errors led to a gradual transformation of public awareness. Recently, parts of the Russian population have turned to ideas of primitive Slavophilism, realizing Russia's unique role in the world. They say that the country must become the leader of the developing, exploited south in a struggle against the developed, exploiting north. They see the West as the main threat to Russia, and speak out for a return to a traditional value system with its corresponding methods of government and development. In Russia today there are at least four concepts of foreign policy and identity that define Russia's attitude toward the near abroad. Public consciousness is uncertain and sometimes combines contradictory ideas.

The first concept, narrow nationalism, is characterized by the identification of Russia with its current borders and a rejection of the differences between the near and far abroad. It is shared, with some differences, by both the "democratic" political elite and common public opinion. The second concept is entirely opposite, and could be described as revisionist or revanchist. Held by the Communists, it champions the revival of the USSR as a union of equal republics (presumably with the system of subsidies). The third concept, held mainly by nationalistic forces, envisions the creation of unequal republics within the former USSR's geopolitical sphere. A variant of this, held by some influential forces inside the nationalist-patriotic camp, views a federal unification of four states: Russia, Ukraine, Belarus, and northern Kazakhstan. Since Russia is obliged to economically subsidize the other members of an unequal union, it must politically dominate them. Finally, the fourth theory has appeared most recently, and can be termed the "national-liberal" concept. It posits that it would be advisable to unite a number of former republics, including Russia, on the basis of a referendum into a federal state on a cultural-historical basis a Slavic-Germanic union of "European" heritage. The constant struggle of these theories and the powers behind them, as well as their impact on the executive leadership of Russia, make Russian politics very unstable. This instability results in a lack of clear tactical and strategic goals with regard to Central Asia.

The notion that Russia has a great deal of control over conflicts in the near abroad is, in reality, much more complex. Since all the conflicts (with the notable exception of Chechnya) take place outside of Russia, but still on former Soviet territory, they become internationalized in two ways. First, sovereign states find themselves engaged in conflict. Second, outside powers also become involved, largely due to the vacuums of political influence which still exist. According to a statement by State Duma Speaker Ivan Rybkin, even Chechnya is being assisted with money, food and forces by twelve nations. Not having a clear and balanced foreign policy, Russia as a rule misses the beginning of conflicts and is forced to enter them when events have progressed past the point of usual political solutions. Instead of playing the role of an arbiter, Russia is forced to become a "fireman" who never has enough time and is doomed to make a number of strategic mistakes. It seems that, until a comprehensive and stable foreign policy is formulated, Russia will need to be prepared to receive constant criticism for its handling of conflicts in the post-Soviet geopolitical space.

Central Asia became an independent political region after the collapse of the socialist system of statehood that united diverse ethnic groups with a long history of complicated relations. The collapse of the Soviet Union led to a situation where these ethnic rivalries and conflicts began to reappear and reengage. Never in history has Central Asia had organized nation-states on its territory, including during the Soviet era. In this region, the process of modern state building is still incomplete. Due to arbitrary demarcations between the republics created by the Soviets in the 1920s, the natural borders of settlement by native peoples were replaced by artificial, administrative separators. Peoples with ethnic, religious and cultural differences were thus forced into a single state. This created tensions throughout the Soviet period, and has the potential to generate wide regional conflict and demands for substantial redrawing of borders. Within the USSR, Central Asia was viewed as a monolithic economic region. First, it had a particular role in the division of labor between the regions of the USSR, with emphasis on raw materials. Second, supplies of some vital goods and resources were directed to the region from Russia. This predetermined the configuration of the present transport network. Third, economic relations ignored administrative borders that have now become sovereign state borders.

Thus there are objective factors contributing to the formation of conflict in Central Asia. It is not likely that any of these factors can be connected with Russia's foreign policy interests. The slaughter of Meshkhetian Turks in the Fergana valley, Uzbeks in Osh and Tajikistan's civil war are in no way connected with the "intrigues of Russia" and the so-called Russian-speaking population.

The historical, political, and especially economic interdependence of Russia and the Central Asian republics allows Russia to preserve its beneficial influence on the reforms and changes that are underway. At the same time, Central Asia's historical, religious and cultural connections with Turkey, Iran, Afghanistan, and to a lesser degree India and China are turning them into competitors for influence in the region.

Undoubtedly national interests, foreign policy goals and strategies of the Central Asian nations will be defined gradually, and their direction will largely depend on internal policies as well as changes in the economic, political and cultural spheres (short-term) and in political culture and behavior (short and medium-term).

Without a sharp increase in the influence of outside powers, the removal of Russia from Central Asia will lead to the creation of a geopolitical situation similar to that of South Asia, with a dominating state (Uzbekistan) and a politically hostile periphery (also Uzbekistan). Taking into account the extremely tense relations between Uzbeks and other ethnic groups in Central Asia, this will cause a new, dangerous state of interregional tension. Competition for natural resources, in particular oil, is not a new phenomenon it has been going on since the internal-combustion engine was invented. However, in the post-Soviet period such competition gains great significance because the transition from "local" to world prices creates demand for certain types of oil. Not just with oil but other natural resources as well, prices that were held down are now set free to compete. For example, the price of cotton has grown 4.5 times, while oil has increased 33 times. This is why possession of oil reserves guarantees maximum growth of profits. However, the struggle for oil is not between Russia and the states of Central Asia but against newly semi-privatized Russian oil companies created after the fall. The sharp increase in the price of energy supplies has another aspect a matching growth in the price of transportation. If transported through Russia, China or Iran, goods from Central Asia will need to travel three to four thousand kilometers on railways to reach the nearest port. Transit payments should be added to this also. In these conditions, Central Asian raw materials (with the exception of oil, gas, and precious stones and metals) lose competitiveness on the world market. This is why the struggle between Russia and foreign competitors for Central Asian raw materials does not make sense economically.

The world market does not lack oil. This explains the open and covert support of sanctions against Iraq by the majority of oil exporters and importers, since Iraqi oil has the capacity to destabilize the international oil market over a long term. That is why exports from Central Asia that are good for both oil importers and transporters are not likely to be met with great enthusiasm by a world market faced with a possible prolonged destabilization because of it.

One can hardly justify Russia's attempts to oppose Iran and Turkey in Central Asia and on the world market. U.S. attempts to slow down economic cooperation between Russia and Iran demonstrates that the West is not interested in strengthening the current regime in Iran and its control over oil transportation to Europe. With regard to Turkey, consolidation of its position in Central Asia has caused some alarm in the West. Transformation of Turkey into a member of the European Union will allow it to transport Central Asian products while falsely claiming them as their own, and could force the West to widen the financial support of Central Asia. However, the European Union is so far ready for neither.

Economic Reorganization of Post-Soviet Space

The most important element in the strategy of Russian economic development is the choice between maintaining economic cooperation with other members of the Newly Independent States (NIS) or reorienting cooperation to the West and East, thus stimulating more independence among the new nations of the former Soviet Union. If the military, political and emotional aspects of the former Soviet sphere could be removed, it would be useful to formulate the problem as a choice of principles of foreign economic activity that would be most adequate to the interests of Russia. Is it economic integration within the NIS or preferential development of cooperation abroad and inevitable isolationism with regard to the former "brother republics?"

Naturally, it is impossible to isolate this problem from the rest; it is nonetheless essential to define the economic interests of Russia, at least on the level of theoretical analysis. There are three factors working for integration. They are: a common system of transportation over former Soviet territory, technological and trade links, and the intensive migration and personal contacts, including economic aspects of these contacts. The Soviet transportation network was created to cover the entire country. It still tightly binds many former republics into common railroad systems, oil and gas pipelines and energy grids. Moreover, Ukraine and the Baltic states control the majority of seaports. With the demise of the Soviet Union, Russia lost half of its port facilities, including important ones on the Black Sea and Baltic Sea. Specialization of ports in the former USSR has led to a lack of certain kinds of port structures, which are available in Ukraine and Baltics. If in the northwest this problem will soon be solved through the development of "import substitution," port infrastructure in the Baltics and the south is not likely to change, even if Russia were to unite with Ukraine. The main reason for water transport deadlock in the south is the Turkish position on the Montreux Convention of 1936, which narrowly defines access to the Mediterranean through the Bosphorus and Dardanelles. It will be quite possible to neutralize these actions after the completion of the Eurasian highway, which will run from Rotterdam to Shanghai, shortening by about 1,700 kilometers the distance south and southeast Asia as well as east Africa. Kazakhstan is interested in the development of Eurasian transportation networks no less so than Russia. Western direction is also the most important one with regard to railways and pipelines. Ukraine and Belarus provide for the transit of Russian goods to Europe and vice-versa. With regard to the south, the states of Central Eurasia and the Caucasus find themselves in a rather difficult situation, since they will separately need to solve import and export problems through third-party countries.

A combination of economic recession and reorientation of economic ties, common to all post-Soviet republics, has caused a considerable decrease in trade between them. Compared to 1991, the share of former Soviet republics' trade turnover in Russia was reduced to one-third, accounting for 23 percent. The leader in trade with Russia is Ukraine, who accounts for one-half of Russia's NIS exports and 40 percent of imports, Belarus' share is 21 percent exports and 20 percent imports, Kazakhstan 15 percent exports and 22 percent imports. The total share of all other states of the NIS is 15 percent exports and 20 percent imports. Only Ukraine is preserved as a major Russian trading partner, but Germany has a trade level equal to that. Belarus is being surpassed by Germany, the United States and Great Britain; Kazakhstan by Italy and China.

As a result, the question of Russia's choice between "integration" and "isolationism" can be answered as integration with the other European Slavic states of Ukraine and Belarus, since without them Russia is cut off from established transportation connections with its trading partners in western and southern Europe. Changing the transport system in this part of Europe will be a very expensive measure indeed.

With regard to other states in the NIS, economic balance is composed more as a division of economies and maintenance of special relations, based on a contractual basis, economic independence and mutual responsibility. Kazakhstan plays a special role in the post-Soviet space. Economic integration with Kazakhstan could bring considerable benefits, since its mineral resources and agricultural potential add to the resource base of Russia. These relations, however, must be based on cooperation between two independent states.

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