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The Jamestown Foundation
Monday, April 18, 2005 -- Volume 2, Issue 75
EURASIA DAILY MONITOR
IN THIS ISSUE:
*Is Armenia's Kocharian planning to try for third term?
*Beijing, Astana announce progress in joint pipeline project
*Poll shows Saakashvili's lead shrinking
*Gazprom, Turkmenistan reach agreement on gas deliveries
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ARMENIA SET TO MISS COUNCIL OF EUROPE DEADLINE FOR CONSTITUTIONAL
REFORM
The Armenian authorities look set to miss a June deadline, set by the
Council of Europe, for enacting sweeping amendments to Armenia's
controversial post-Soviet constitution. Officials in Yerevan admit
that a nationwide referendum on constitutional changes put forward by
President Robert Kocharian and his governing coalition may well be
postponed until after the summer.
For months an ad hoc commission of the Armenian parliament has been
trying to put the finishing touches on the package of amendments
before their formal approval by the National Assembly. The process has
clearly stalled in recent weeks under still-uncertain
circumstances. Meeting with senior government officials and leaders of
his loyal parliamentary majority on April 8, Kocharian expressed
concern about the slowdown and stressed the need for a "high degree of
mutual agreement" among his political allies.
Constitutional reform was one of the conditions for Armenia's hard-won
accession to the Council of Europe in January 2001. The country's
basic law has widely been criticized for vesting too many powers in
the presidency ever since its adoption at a hotly disputed referendum
in 1995. The Armenian president, for example, can single-handedly form
governments, appoint and sack virtually all judges, and dissolve the
legislature practically at will.
Kocharian pledged to curtail presidential authority in favor of the
judicial and legislative branches when he came to power in 1998. But
it was not until 2001 that the reform effort began in earnest. The
Armenian opposition rejected Kocharian's first constitutional package
as cosmetic, and the changes failed to garner sufficient popular
support at a referendum held concurrently with the May 2003
parliamentary elections.
Kocharian and three parties represented in his government have since
been revising some of the original draft amendments in a bid to win
greater public support for the reform. The preliminary version of
their revised constitutional package was made public last November and
prompted criticism from the so-called Venice Commission of the Council
of Europe, which monitors legislative reform in the Strasbourg-based
organization's member countries.
The Venice Commission concluded in a December report that the proposed
changes are one step back from Kocharian's 2003 package and called for
"more significant amendments." It noted in particular that the
Armenian parliament would remain "subordinated" to the president and
play no role in the nomination and dismissal of prime ministers.
The Armenian opposition, which refuses to recognize Kocharian's
disputed 2003 reelection, has been even more critical. Opposition
leaders have said all along that Kocharian lacks the legitimacy to
initiate constitutional reform in the first place. Still, they
announced in January that they are ready to support the reform if the
authorities embrace three significant amendments. Those would empower
the parliament to endorse prime-ministerial candidates nominated by
the president, seriously limit the latter's controversial authority to
appoint judges, and make the mayor of Yerevan an elected official. The
parliament majority effectively rejected the proposed deal.
All three amendments demanded by the opposition stemmed from the
Venice Commission's recommendations. Some local observers say the
opposition offer was a ploy to embarrass the ruling regime and portray
it as uncooperative before the Europeans. Kocharian and his allies may
also have reached this conclusion.
Giving weight to this theory is the fact that the parliamentary
commission on constitutional reform began making further changes in
the package in February. Its chairman, Tigran Torosian, said on April
11 that the Armenian authorities are eager to meet all of the Venice
Commission recommendations and cooperate with the opposition.
In a resolution adopted last September, the Parliamentary Assembly of
the Council of Europe (PACE) urged Yerevan to hold the constitutional
referendum in June at the latest. But the Armenian parliament, which
must set a date for the vote, will start debating the issue only next
month, making the deadline all but impossible to meet. Torosian noted
that it "won't be a tragedy" if the referendum is held a few months
later. Other parliamentary majority leaders have indicated that it
could be held simultaneously with local elections scheduled for
October.
Another possible reason for the delay is that Kocharian apparently
remains undecided about whether to step down after completing his
second five-year term in 2008. The Armenian constitution bars him from
seeking a third consecutive term. Kocharian aides have said repeatedly
that the Armenian leader has no intention to remove that
restriction. However, a lack of transparency in the work of Torosian's
commission only adds to the uncertainty.
A legal loophole allowing Kocharian to stay in power after 2008 would
hardly please the West and could enable the opposition to mobilize
greater popular support for its hitherto unsuccessful efforts to
replicate anti-government uprisings across the former Soviet
Union. Opposition leaders have already pledged to turn the
constitutional referendum into a "referendum of confidence" in the
Armenian leader. They have said that they are waiting for the "right
moment" to make another push for regime change. They may well have
election day in mind.
(Hayots Ashkhar, April 12; Presidential Press Service, April 8; RFE/RL
Armenia Report, January 21, February 3)
--Emil Danielyan
SINO-KAZAKH PIPELINE PROJECT HAS DEMOGRAPHIC, AS WELL AS ECONOMIC,
DIMENSIONS
With its already enormous resources in the Caspian region,
Kazakhstan's oil and gas sector has begun to turns its attention
toward China's rapidly developing Xinjiang Uighur Autonomous Region.
On April 4, the Committee for Sino-Kazakh Energy Cooperation held its
inaugural meeting in Astana. The deputy chairman of China's State
Committee for Economic Development and Reform, Chan Gobao, announced
that construction of the first phase of the 920-kilometer
Atasu–Alashankou pipeline would be completed by December 16. The
pipeline will transport Kazakh oil for processing in Western
China. The pipeline is projected to initially pump 10 million tons of
crude oil annually, gradually increasing the capacity of the pipeline
to 20 million tons annually by the year 2010.
However, the Chinese side has some doubts about whether Kazakhstan's
ailing oil industry can supply that amount of crude. Therefore the
first contract signed between the two governments is fixed at around
7.5 million tons. Nevertheless, the executive manager of Kazakhstan's
state KazMunayGaz oil and gas company, Kairgeldy Kabyldin, hastened to
say that some Russian oil companies have also shown interest in
pumping their oil through this pipeline (Ekspress-K, April 5).
Kazakhstan and China signed their first pipeline agreement in
1997. Since that time the Chinese National Petroleum Company (CNPC)
has secured its position in Aktobe region, establishing the
CNPC-Aktobemunaygaz joint-stock company. Last year the Chinese company
produced no more than 5 million tons of oil. According to the region's
leading oil expert, Bayan Sarsenbina, the Chinese company, even in
cooperation with other oil producers, will not be able to supply 10
million tons to ship through the pipeline to Western China in coming
years.
The Chinese are not primarily interested in deals to develop their oil
industry's infrastructure. Rather, Beijing has a long-term political
strategy that serves its own interests, while locking in a reliable
partner to boost oil production. When CNPC owned oil shares in Aktobe
region, the Chinese side signed a contract promising $4 billion of
investment in 20 years, but now rising oil prices make Kazakhstan a
source of cheap crude oil for China, while the CNPC appeases the
Aktobe regional government with insignificant taxes, occasional
charitable campaigns, and handouts to the poor (Zhas Alash, April 7).
Kazakh government officials welcomed the economic boom in western
China because it provides a huge energy-resources market for the
country. The Chinese State Committee for Economic Development and
Reform announced that China might import 145 million tons of oil in
the next 15 years. The Kazakh-Chinese Committee for Energy Cooperation
also discussed the possibility of building a 7,000-kilometer gas
pipeline from the Karashaganak oil field to China. But Chinese members
of the committee complained about the high transportation costs for
gas and refused to consider the project (Ekspress-K, April 5).
While it might welcome the economic investment, Kazakhstan's
population remains fearful of the political and demographic threats
connected to expanding Chinese economic and trade ties. China has
always used the lack of qualified oil specialists in Kazakhstan as an
excuse to bring in large numbers of Chinese labor to work in the
oilfields of West Kazakhstan, while unemployment among the local
population continues to grow. Consequently, employees of Chinese
companies often face financial and social discrimination. Amid the
growing public resentment, Kazakhstan's Deputy Minister of Labor and
Social Protection, Bauyrzhan Ashitov, disclosed a government plan to
recruit 20,000 foreign oil specialists this year. This decision
provoked strong protests.
The local population had been led to believe that the
Atasu–Alashankou oil pipeline would create hundreds of jobs in
western and southern Kazakhstan, alleviating long-standing social
problems. But some sources say that CNPC now intends to hire 10,000
Chinese workers to construct the pipeline. Locals fear that many of
the guest workers will ultimately try to settle in Kazakhstan
permanently.
The famous Kazakh writer Sherkhan Murtaza believes that ongoing
Chinese migration poses a greater threat to Kazakhs than did 300 years
of Russian rule. The Russians tried but ultimately could not deprive
Kazakhs of their ethnic identity. Kazakhstan may not be so lucky with
the Chinese. Murtaza argued that Kazakh law should be amended to
forbid Kazakh girls from marrying Chinese citizens.
The government of Kazakhstan appears to have lost track of migration
flows. No one in the Migration Agency can provide accurate numbers of
how many Chinese live in Kazakhstan illegally, although independent
sources indicate that hundreds live in the cities of Pavlodar, Aktobe,
and Semey without being registered. The head of the Almaty migration
police admitted that the local force could no longer take any
effective measures to stop the tide of Chinese migration (Zan Gazeti,
April 8).
However, Beijing has chosen to disregard this resentment and is
continuing its advance toward distant markets and resources via
Kazakhstan. China has skillfully exploited its diplomatic leverage
within the Shanghai Cooperation Organization, the India-Russia-China
axis, and the chill in US-European relations to its advantage.
Quite recently, the visiting chairman of the French Senate, Aymeri de
Montesquiou, spoke with his Kazakh counterpart, Nurtay Abykayev, about
building a narrow-gauge railway to link Europe and China via
Kazakhstan. He also spoke in favor of a gas pipeline to China
(Kazakhstan Today, April 6).
In another effort to expand its economic interests in Kazakhstan,
China secured Astana's de facto support in fighting Muslim separatists
in East Turkestan. In October 2004 the Supreme Court of Kazakhstan
branded the Islamic Party of East Turkestan as a terrorist
organization. Apparently, this will not be the last of Kazakhstan's
political concessions to China.
Broadly speaking, Chinese expansion poses serious political and
demographic threats not only to Kazakhstan, but also to the region as
a whole. It will be deterred only by concerted actions and common
policy among all Central Asian countries. But the current atmosphere
of relations among these states is far from amicable.
--Marat Yermukanov
SAAKASHVILI CONCERNED AS HIS MARGIN OF SUPPORT CONTINUES TO DECLINE
At a closed-door meeting on April 9, Georgian President Mikheil
Saakashvili sharply criticized his ministers for alienating the
general public. Prime Minister Zurab Nogaideli later confirmed the
tongue-lashing (Rustavi-2 TV, Imedi TV, April 11). Saakashvili had
good reason to lecture the cabinet; the latest opinion polls have
alarmed the ruling party.
A nationwide survey conducted in March by Georgian Opinion Research
Business International (GORBI), the Georgian branch of Gallup
International, revealed the population's growing frustration with the
government, including Saakashvili himself. The poll showed Saakashvili
and his National Movement party atop the list of the country's most
popular political parties and leaders, drawing the support of slightly
more than one-third of those surveyed. But the poll also revealed
increased skepticism regarding Saakashvili's policies.
According to the survey, 39% of respondents believe that Georgia is
"developing in the wrong direction." In a similar GORBI survey
conducted in February 2004, shortly after Saakashvili's presidential
victory, 79% of respondents believed that Georgia under Saakashvili
was "on the right path" (gorbi.com).
The March 2005 poll indicates that 37% of respondents think that the
"life has improved" under Saakashvili's governance, while 34% believe
it has not and 29% are undecided. Some, 72% of respondents do not want
to return to the type of governance seen under Saakashvili's
predecessor, Eduard Shevardnadze.
Saakashvili remains Georgia's unchallenged leader, with 38.2% support,
a level that has dropped by 25% in the past six months. Although
respondents saw no credible rival to Saakashvili, many opposition
parties and leaders are steadily regaining their political strength.
Based on the poll's finding, if parliamentary elections were held now,
only the ruling National Movement (with 34.7%) and the opposition
Labor Party (at 7. 2%) could clear the 7% electoral threshold. The
opposition New Rights Party polled 4.3%, while the moderately
opposition Conservative Party and Republican parties garnered 1.5%
each. The pro-governmental "Ertoba" (Unity) registered only 1.3%. But
48% of respondents could not choose a favorite political party. In
comparison with 2004, the number of active electors without a party
preference has increased by 20%, according to GORBI.
Among individual political leaders, President Saakashvili (38.2%) and
Parliament chair Nino Burjanadze (7.1%) have won the trust of the
population. Labor Party leader Shalva Natelashvili comes third with
5.4%, followed by Jumber Patiashvili (Ertoba) at 1.6%; Koba
Davitashvili (Conservatives) at 1.5%; Davit Gamkrelidze (New Rights)
at 1.2%; and Defense Minister Irakli Okruashvili at 1.1%. However,
40.6% of respondents remain undecided.
Among the politicians perceived as best able to fight the corruption
that still plagues Georgia, Saakashvili (38%), Burjanadze (30%), and
Okruashvili (24%) lead the list. They are followed by Davitashvili
(11%), Gamkrelidze (10%), and Natelashvili (10%).
Jago Kachkachishvili, a professor of sociology at Tbilisi State
University who led a university survey that yielded results similar to
GORBI's, explains that the population is still favorable toward the
political leadership thanks to its deep reservoir of popular trust,
Saakashvili's personal charisma, and the weakness of the opposition,
which has yet to produce a trustworthy alternative (Akhali, 7 Dge,
April 8-14).
However, changing conditions are slowly swaying some voters toward the
opposition. Accumulating social problems, mass downsizing without
severance benefits at state-funded organizations (reportedly some
50,000 people have lost their jobs), protest rallies by various
interest groups, frequent violations of law and human rights, and the
protracted energy crisis have shifted part of the electorate to the
opposition forces.
Some analysts tend to consider the latest protest actions to be more
an attempt to draw government attention toward the unresolved problems
than an effort to confront the government. Political analyst Ramaz
Sakvarelidze, a member of Saakashvili's advisory council, argues that
unlike the protests that led to the Rose Revolution, current
anti-government actions lack trustworthy leaders (Resonance, March
7). Ghia Nodia, chair of the Caucasus Institute for Peace, Democracy,
and Development, says that that the opposition has the potential to
become an alternative political force, although the lack of a clear
public message hinders this process. He says that popular discontent
alone is not sufficient to form a viable opposition (Alia, March 31).
However, other analysts think that increasing social protests
"supported" by foreign [read Russian] special services might spawn a
mass anti-governmental movement capable of ousting Saakashvili.
Based on his own research that shows Labor polling 21% of supporters
compared to 11% for the ruling National Movement, Labor Party leader
Natelashvili claims that most of the Georgian population is
"aggressively against" Saakashvili's regime. He argues that "social
demands will [eventually] turn political and then political leaders
must come to the forefront" (Resonance, March 15).
While Saakashvili and his cadres are trying to put a good face on
things and blame legacies of the Shevardnadze era for current
problems, some members of the ruling party take a more sober
view. David Zurabishvili, deputy leader of the ruling party's
parliamentary majority, argues that the authorities must go and talk
with the protesters, even those making unacceptable demands, in order
to avoid the mistakes made by the previous government (24 Saati, March
23). Nugzar Mgeladze, another parliamentarian, argues that launching
a flurry of necessary but painful reforms simultaneously was not a
wise step. If the severe social problems are not resolved soon, the
ruling party might lose power, he warned (Akhali Taoba, March 31).
Political life in Georgia is becoming distinguished by the
multiplication of opposition movements of many stripes. Two large
civic opposition movements, "Forward Georgia" and the "Public Forum
for Welfare and Democracy," have emerged in the last four
months. Increasingly, such opposition groups are calling on their
colleagues to coordinate their efforts.
--Zaal Anjaparidze
TURKMENISTAN TO RESUME GAS DELIVERIES AFTER RUSSIAN CONCESSION
On April 15 in Ashgabat, Gazprom Chairman Alexei Miller satisfied
Turkmenistan's President Saparmurat Niyazov's demand to switch to
all-cash payments for Turkmen gas delivered to Russia. In return for
this concession, Turkmenistan seems set to resume the deliveries,
which it halted on January 1, 2005, in order to persuade Russia to
change the pricing arrangements. Those arrangements had been onerous
for Turkmenistan since their inception (2003) and became even more
disadvantageous in the context of ongoing price trends on
international markets.
The Russian-Turkmen contract, signed in 2003 and covering the years
2004-2006, had set the Russian purchase price at $44, to be paid 50%
in cash and 50% by bartered goods, per 1,000 cubic meters of Turkmen
gas at the country's border. In late 2004-early 2005, Niyazov demanded
a price hike to $58 per 1,000 cubic meters with full payment in cash,
and it suspended the deliveries when Gazprom refused to renegotiate
the contract.
Although Gazprom insisted that its legal position was unassailable
until the contract's expiry, and proposed renegotiating the price for
2007 and the subsequent years, Niyazov stood his ground. It was only
midway through the year's second quarter, on Miller's second visit to
Ashgabat this year, that Gazprom obtained the resumption of deliveries
by yielding to one of the Turkmen demands (the structure of payments),
albeit not the main one (the price itself). Meanwhile, Turkmen gas
remains almost certainly the cheapest in the world at the point of
delivery, due to Russia's near-monopoly on the transit.
Ashgabat's argument for full cash payments was two-fold. First, the
reference prices for Russian steel and other metallurgical products --
the mainstay of the barter component of Russian payments -- have risen
significantly, thus reducing the quantities delivered, as well as
raising the cost of gas extraction and transport where those products
are used in Turkmenistan. Second, Niyazov characterized the barter
component as an unacceptable Soviet relic, incompatible with market
relations.
Turkmenistan obtained this concession because Gazprom needs growing
volumes of Turkmen gas for use within Russia, so as to release
Russian-produced gas for export to lucrative European markets. With
gas extraction in Russia basically stagnant, and investment capital in
short supply for field development, it becomes increasingly
problematic for Gazprom to meet its commitments to European
countries. Thus, the 7 billion cubic meters of gas that Turkmenistan
is due to deliver to Russia in 2005 -- rising to 10 billion cubic
meters in 2006 -- have become significant to Russia's balance of gas
consumption and export.
According to Miller, at the end of the three-day negotiations in
Ashgabat, Turkmen gas deliveries to Russia from this point on are to
adhere to the schedule for 2005 as stipulated by the three-year
contract. This phrasing does not clarify when the deliveries would
resume, and whether Turkmenistan would make up for the volumes that
were due to have been delivered from January through April to Russia.
In January Ukraine had accepted Ashgabat's desire to raise the
purchase price for Turkmen gas from $44 to $58 per 1,000 cubic meters
of gas, but retained the structure of payments as 50% in cash and 50%
in the form of goods and services. Under Ukraine's contracts with
Turkmenistan -- unlike Russia's contracts with that country -- prices
are subject to renegotiation annually. At present, Ukraine seeks to
increase the barter component of its payments for Turkmen gas. This
goal seems more difficult to attain, now that Russia has agreed to
eliminate that component from its pricing arrangements with
Turkmenistan.
(Interfax, Turkmen TV Channel One, April 15; see EDM, January 6, 12,
February 11, March 24)
--Vladimir Socor
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The Eurasia Daily Monitor, a publication of the Jamestown Foundation,
is edited by Ann E. Robertson. The opinions expressed in it are those
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Copyright (c) 1983-2005 The Jamestown Foundation.
From: Baghdasarian
Monday, April 18, 2005 -- Volume 2, Issue 75
EURASIA DAILY MONITOR
IN THIS ISSUE:
*Is Armenia's Kocharian planning to try for third term?
*Beijing, Astana announce progress in joint pipeline project
*Poll shows Saakashvili's lead shrinking
*Gazprom, Turkmenistan reach agreement on gas deliveries
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ARMENIA SET TO MISS COUNCIL OF EUROPE DEADLINE FOR CONSTITUTIONAL
REFORM
The Armenian authorities look set to miss a June deadline, set by the
Council of Europe, for enacting sweeping amendments to Armenia's
controversial post-Soviet constitution. Officials in Yerevan admit
that a nationwide referendum on constitutional changes put forward by
President Robert Kocharian and his governing coalition may well be
postponed until after the summer.
For months an ad hoc commission of the Armenian parliament has been
trying to put the finishing touches on the package of amendments
before their formal approval by the National Assembly. The process has
clearly stalled in recent weeks under still-uncertain
circumstances. Meeting with senior government officials and leaders of
his loyal parliamentary majority on April 8, Kocharian expressed
concern about the slowdown and stressed the need for a "high degree of
mutual agreement" among his political allies.
Constitutional reform was one of the conditions for Armenia's hard-won
accession to the Council of Europe in January 2001. The country's
basic law has widely been criticized for vesting too many powers in
the presidency ever since its adoption at a hotly disputed referendum
in 1995. The Armenian president, for example, can single-handedly form
governments, appoint and sack virtually all judges, and dissolve the
legislature practically at will.
Kocharian pledged to curtail presidential authority in favor of the
judicial and legislative branches when he came to power in 1998. But
it was not until 2001 that the reform effort began in earnest. The
Armenian opposition rejected Kocharian's first constitutional package
as cosmetic, and the changes failed to garner sufficient popular
support at a referendum held concurrently with the May 2003
parliamentary elections.
Kocharian and three parties represented in his government have since
been revising some of the original draft amendments in a bid to win
greater public support for the reform. The preliminary version of
their revised constitutional package was made public last November and
prompted criticism from the so-called Venice Commission of the Council
of Europe, which monitors legislative reform in the Strasbourg-based
organization's member countries.
The Venice Commission concluded in a December report that the proposed
changes are one step back from Kocharian's 2003 package and called for
"more significant amendments." It noted in particular that the
Armenian parliament would remain "subordinated" to the president and
play no role in the nomination and dismissal of prime ministers.
The Armenian opposition, which refuses to recognize Kocharian's
disputed 2003 reelection, has been even more critical. Opposition
leaders have said all along that Kocharian lacks the legitimacy to
initiate constitutional reform in the first place. Still, they
announced in January that they are ready to support the reform if the
authorities embrace three significant amendments. Those would empower
the parliament to endorse prime-ministerial candidates nominated by
the president, seriously limit the latter's controversial authority to
appoint judges, and make the mayor of Yerevan an elected official. The
parliament majority effectively rejected the proposed deal.
All three amendments demanded by the opposition stemmed from the
Venice Commission's recommendations. Some local observers say the
opposition offer was a ploy to embarrass the ruling regime and portray
it as uncooperative before the Europeans. Kocharian and his allies may
also have reached this conclusion.
Giving weight to this theory is the fact that the parliamentary
commission on constitutional reform began making further changes in
the package in February. Its chairman, Tigran Torosian, said on April
11 that the Armenian authorities are eager to meet all of the Venice
Commission recommendations and cooperate with the opposition.
In a resolution adopted last September, the Parliamentary Assembly of
the Council of Europe (PACE) urged Yerevan to hold the constitutional
referendum in June at the latest. But the Armenian parliament, which
must set a date for the vote, will start debating the issue only next
month, making the deadline all but impossible to meet. Torosian noted
that it "won't be a tragedy" if the referendum is held a few months
later. Other parliamentary majority leaders have indicated that it
could be held simultaneously with local elections scheduled for
October.
Another possible reason for the delay is that Kocharian apparently
remains undecided about whether to step down after completing his
second five-year term in 2008. The Armenian constitution bars him from
seeking a third consecutive term. Kocharian aides have said repeatedly
that the Armenian leader has no intention to remove that
restriction. However, a lack of transparency in the work of Torosian's
commission only adds to the uncertainty.
A legal loophole allowing Kocharian to stay in power after 2008 would
hardly please the West and could enable the opposition to mobilize
greater popular support for its hitherto unsuccessful efforts to
replicate anti-government uprisings across the former Soviet
Union. Opposition leaders have already pledged to turn the
constitutional referendum into a "referendum of confidence" in the
Armenian leader. They have said that they are waiting for the "right
moment" to make another push for regime change. They may well have
election day in mind.
(Hayots Ashkhar, April 12; Presidential Press Service, April 8; RFE/RL
Armenia Report, January 21, February 3)
--Emil Danielyan
SINO-KAZAKH PIPELINE PROJECT HAS DEMOGRAPHIC, AS WELL AS ECONOMIC,
DIMENSIONS
With its already enormous resources in the Caspian region,
Kazakhstan's oil and gas sector has begun to turns its attention
toward China's rapidly developing Xinjiang Uighur Autonomous Region.
On April 4, the Committee for Sino-Kazakh Energy Cooperation held its
inaugural meeting in Astana. The deputy chairman of China's State
Committee for Economic Development and Reform, Chan Gobao, announced
that construction of the first phase of the 920-kilometer
Atasu–Alashankou pipeline would be completed by December 16. The
pipeline will transport Kazakh oil for processing in Western
China. The pipeline is projected to initially pump 10 million tons of
crude oil annually, gradually increasing the capacity of the pipeline
to 20 million tons annually by the year 2010.
However, the Chinese side has some doubts about whether Kazakhstan's
ailing oil industry can supply that amount of crude. Therefore the
first contract signed between the two governments is fixed at around
7.5 million tons. Nevertheless, the executive manager of Kazakhstan's
state KazMunayGaz oil and gas company, Kairgeldy Kabyldin, hastened to
say that some Russian oil companies have also shown interest in
pumping their oil through this pipeline (Ekspress-K, April 5).
Kazakhstan and China signed their first pipeline agreement in
1997. Since that time the Chinese National Petroleum Company (CNPC)
has secured its position in Aktobe region, establishing the
CNPC-Aktobemunaygaz joint-stock company. Last year the Chinese company
produced no more than 5 million tons of oil. According to the region's
leading oil expert, Bayan Sarsenbina, the Chinese company, even in
cooperation with other oil producers, will not be able to supply 10
million tons to ship through the pipeline to Western China in coming
years.
The Chinese are not primarily interested in deals to develop their oil
industry's infrastructure. Rather, Beijing has a long-term political
strategy that serves its own interests, while locking in a reliable
partner to boost oil production. When CNPC owned oil shares in Aktobe
region, the Chinese side signed a contract promising $4 billion of
investment in 20 years, but now rising oil prices make Kazakhstan a
source of cheap crude oil for China, while the CNPC appeases the
Aktobe regional government with insignificant taxes, occasional
charitable campaigns, and handouts to the poor (Zhas Alash, April 7).
Kazakh government officials welcomed the economic boom in western
China because it provides a huge energy-resources market for the
country. The Chinese State Committee for Economic Development and
Reform announced that China might import 145 million tons of oil in
the next 15 years. The Kazakh-Chinese Committee for Energy Cooperation
also discussed the possibility of building a 7,000-kilometer gas
pipeline from the Karashaganak oil field to China. But Chinese members
of the committee complained about the high transportation costs for
gas and refused to consider the project (Ekspress-K, April 5).
While it might welcome the economic investment, Kazakhstan's
population remains fearful of the political and demographic threats
connected to expanding Chinese economic and trade ties. China has
always used the lack of qualified oil specialists in Kazakhstan as an
excuse to bring in large numbers of Chinese labor to work in the
oilfields of West Kazakhstan, while unemployment among the local
population continues to grow. Consequently, employees of Chinese
companies often face financial and social discrimination. Amid the
growing public resentment, Kazakhstan's Deputy Minister of Labor and
Social Protection, Bauyrzhan Ashitov, disclosed a government plan to
recruit 20,000 foreign oil specialists this year. This decision
provoked strong protests.
The local population had been led to believe that the
Atasu–Alashankou oil pipeline would create hundreds of jobs in
western and southern Kazakhstan, alleviating long-standing social
problems. But some sources say that CNPC now intends to hire 10,000
Chinese workers to construct the pipeline. Locals fear that many of
the guest workers will ultimately try to settle in Kazakhstan
permanently.
The famous Kazakh writer Sherkhan Murtaza believes that ongoing
Chinese migration poses a greater threat to Kazakhs than did 300 years
of Russian rule. The Russians tried but ultimately could not deprive
Kazakhs of their ethnic identity. Kazakhstan may not be so lucky with
the Chinese. Murtaza argued that Kazakh law should be amended to
forbid Kazakh girls from marrying Chinese citizens.
The government of Kazakhstan appears to have lost track of migration
flows. No one in the Migration Agency can provide accurate numbers of
how many Chinese live in Kazakhstan illegally, although independent
sources indicate that hundreds live in the cities of Pavlodar, Aktobe,
and Semey without being registered. The head of the Almaty migration
police admitted that the local force could no longer take any
effective measures to stop the tide of Chinese migration (Zan Gazeti,
April 8).
However, Beijing has chosen to disregard this resentment and is
continuing its advance toward distant markets and resources via
Kazakhstan. China has skillfully exploited its diplomatic leverage
within the Shanghai Cooperation Organization, the India-Russia-China
axis, and the chill in US-European relations to its advantage.
Quite recently, the visiting chairman of the French Senate, Aymeri de
Montesquiou, spoke with his Kazakh counterpart, Nurtay Abykayev, about
building a narrow-gauge railway to link Europe and China via
Kazakhstan. He also spoke in favor of a gas pipeline to China
(Kazakhstan Today, April 6).
In another effort to expand its economic interests in Kazakhstan,
China secured Astana's de facto support in fighting Muslim separatists
in East Turkestan. In October 2004 the Supreme Court of Kazakhstan
branded the Islamic Party of East Turkestan as a terrorist
organization. Apparently, this will not be the last of Kazakhstan's
political concessions to China.
Broadly speaking, Chinese expansion poses serious political and
demographic threats not only to Kazakhstan, but also to the region as
a whole. It will be deterred only by concerted actions and common
policy among all Central Asian countries. But the current atmosphere
of relations among these states is far from amicable.
--Marat Yermukanov
SAAKASHVILI CONCERNED AS HIS MARGIN OF SUPPORT CONTINUES TO DECLINE
At a closed-door meeting on April 9, Georgian President Mikheil
Saakashvili sharply criticized his ministers for alienating the
general public. Prime Minister Zurab Nogaideli later confirmed the
tongue-lashing (Rustavi-2 TV, Imedi TV, April 11). Saakashvili had
good reason to lecture the cabinet; the latest opinion polls have
alarmed the ruling party.
A nationwide survey conducted in March by Georgian Opinion Research
Business International (GORBI), the Georgian branch of Gallup
International, revealed the population's growing frustration with the
government, including Saakashvili himself. The poll showed Saakashvili
and his National Movement party atop the list of the country's most
popular political parties and leaders, drawing the support of slightly
more than one-third of those surveyed. But the poll also revealed
increased skepticism regarding Saakashvili's policies.
According to the survey, 39% of respondents believe that Georgia is
"developing in the wrong direction." In a similar GORBI survey
conducted in February 2004, shortly after Saakashvili's presidential
victory, 79% of respondents believed that Georgia under Saakashvili
was "on the right path" (gorbi.com).
The March 2005 poll indicates that 37% of respondents think that the
"life has improved" under Saakashvili's governance, while 34% believe
it has not and 29% are undecided. Some, 72% of respondents do not want
to return to the type of governance seen under Saakashvili's
predecessor, Eduard Shevardnadze.
Saakashvili remains Georgia's unchallenged leader, with 38.2% support,
a level that has dropped by 25% in the past six months. Although
respondents saw no credible rival to Saakashvili, many opposition
parties and leaders are steadily regaining their political strength.
Based on the poll's finding, if parliamentary elections were held now,
only the ruling National Movement (with 34.7%) and the opposition
Labor Party (at 7. 2%) could clear the 7% electoral threshold. The
opposition New Rights Party polled 4.3%, while the moderately
opposition Conservative Party and Republican parties garnered 1.5%
each. The pro-governmental "Ertoba" (Unity) registered only 1.3%. But
48% of respondents could not choose a favorite political party. In
comparison with 2004, the number of active electors without a party
preference has increased by 20%, according to GORBI.
Among individual political leaders, President Saakashvili (38.2%) and
Parliament chair Nino Burjanadze (7.1%) have won the trust of the
population. Labor Party leader Shalva Natelashvili comes third with
5.4%, followed by Jumber Patiashvili (Ertoba) at 1.6%; Koba
Davitashvili (Conservatives) at 1.5%; Davit Gamkrelidze (New Rights)
at 1.2%; and Defense Minister Irakli Okruashvili at 1.1%. However,
40.6% of respondents remain undecided.
Among the politicians perceived as best able to fight the corruption
that still plagues Georgia, Saakashvili (38%), Burjanadze (30%), and
Okruashvili (24%) lead the list. They are followed by Davitashvili
(11%), Gamkrelidze (10%), and Natelashvili (10%).
Jago Kachkachishvili, a professor of sociology at Tbilisi State
University who led a university survey that yielded results similar to
GORBI's, explains that the population is still favorable toward the
political leadership thanks to its deep reservoir of popular trust,
Saakashvili's personal charisma, and the weakness of the opposition,
which has yet to produce a trustworthy alternative (Akhali, 7 Dge,
April 8-14).
However, changing conditions are slowly swaying some voters toward the
opposition. Accumulating social problems, mass downsizing without
severance benefits at state-funded organizations (reportedly some
50,000 people have lost their jobs), protest rallies by various
interest groups, frequent violations of law and human rights, and the
protracted energy crisis have shifted part of the electorate to the
opposition forces.
Some analysts tend to consider the latest protest actions to be more
an attempt to draw government attention toward the unresolved problems
than an effort to confront the government. Political analyst Ramaz
Sakvarelidze, a member of Saakashvili's advisory council, argues that
unlike the protests that led to the Rose Revolution, current
anti-government actions lack trustworthy leaders (Resonance, March
7). Ghia Nodia, chair of the Caucasus Institute for Peace, Democracy,
and Development, says that that the opposition has the potential to
become an alternative political force, although the lack of a clear
public message hinders this process. He says that popular discontent
alone is not sufficient to form a viable opposition (Alia, March 31).
However, other analysts think that increasing social protests
"supported" by foreign [read Russian] special services might spawn a
mass anti-governmental movement capable of ousting Saakashvili.
Based on his own research that shows Labor polling 21% of supporters
compared to 11% for the ruling National Movement, Labor Party leader
Natelashvili claims that most of the Georgian population is
"aggressively against" Saakashvili's regime. He argues that "social
demands will [eventually] turn political and then political leaders
must come to the forefront" (Resonance, March 15).
While Saakashvili and his cadres are trying to put a good face on
things and blame legacies of the Shevardnadze era for current
problems, some members of the ruling party take a more sober
view. David Zurabishvili, deputy leader of the ruling party's
parliamentary majority, argues that the authorities must go and talk
with the protesters, even those making unacceptable demands, in order
to avoid the mistakes made by the previous government (24 Saati, March
23). Nugzar Mgeladze, another parliamentarian, argues that launching
a flurry of necessary but painful reforms simultaneously was not a
wise step. If the severe social problems are not resolved soon, the
ruling party might lose power, he warned (Akhali Taoba, March 31).
Political life in Georgia is becoming distinguished by the
multiplication of opposition movements of many stripes. Two large
civic opposition movements, "Forward Georgia" and the "Public Forum
for Welfare and Democracy," have emerged in the last four
months. Increasingly, such opposition groups are calling on their
colleagues to coordinate their efforts.
--Zaal Anjaparidze
TURKMENISTAN TO RESUME GAS DELIVERIES AFTER RUSSIAN CONCESSION
On April 15 in Ashgabat, Gazprom Chairman Alexei Miller satisfied
Turkmenistan's President Saparmurat Niyazov's demand to switch to
all-cash payments for Turkmen gas delivered to Russia. In return for
this concession, Turkmenistan seems set to resume the deliveries,
which it halted on January 1, 2005, in order to persuade Russia to
change the pricing arrangements. Those arrangements had been onerous
for Turkmenistan since their inception (2003) and became even more
disadvantageous in the context of ongoing price trends on
international markets.
The Russian-Turkmen contract, signed in 2003 and covering the years
2004-2006, had set the Russian purchase price at $44, to be paid 50%
in cash and 50% by bartered goods, per 1,000 cubic meters of Turkmen
gas at the country's border. In late 2004-early 2005, Niyazov demanded
a price hike to $58 per 1,000 cubic meters with full payment in cash,
and it suspended the deliveries when Gazprom refused to renegotiate
the contract.
Although Gazprom insisted that its legal position was unassailable
until the contract's expiry, and proposed renegotiating the price for
2007 and the subsequent years, Niyazov stood his ground. It was only
midway through the year's second quarter, on Miller's second visit to
Ashgabat this year, that Gazprom obtained the resumption of deliveries
by yielding to one of the Turkmen demands (the structure of payments),
albeit not the main one (the price itself). Meanwhile, Turkmen gas
remains almost certainly the cheapest in the world at the point of
delivery, due to Russia's near-monopoly on the transit.
Ashgabat's argument for full cash payments was two-fold. First, the
reference prices for Russian steel and other metallurgical products --
the mainstay of the barter component of Russian payments -- have risen
significantly, thus reducing the quantities delivered, as well as
raising the cost of gas extraction and transport where those products
are used in Turkmenistan. Second, Niyazov characterized the barter
component as an unacceptable Soviet relic, incompatible with market
relations.
Turkmenistan obtained this concession because Gazprom needs growing
volumes of Turkmen gas for use within Russia, so as to release
Russian-produced gas for export to lucrative European markets. With
gas extraction in Russia basically stagnant, and investment capital in
short supply for field development, it becomes increasingly
problematic for Gazprom to meet its commitments to European
countries. Thus, the 7 billion cubic meters of gas that Turkmenistan
is due to deliver to Russia in 2005 -- rising to 10 billion cubic
meters in 2006 -- have become significant to Russia's balance of gas
consumption and export.
According to Miller, at the end of the three-day negotiations in
Ashgabat, Turkmen gas deliveries to Russia from this point on are to
adhere to the schedule for 2005 as stipulated by the three-year
contract. This phrasing does not clarify when the deliveries would
resume, and whether Turkmenistan would make up for the volumes that
were due to have been delivered from January through April to Russia.
In January Ukraine had accepted Ashgabat's desire to raise the
purchase price for Turkmen gas from $44 to $58 per 1,000 cubic meters
of gas, but retained the structure of payments as 50% in cash and 50%
in the form of goods and services. Under Ukraine's contracts with
Turkmenistan -- unlike Russia's contracts with that country -- prices
are subject to renegotiation annually. At present, Ukraine seeks to
increase the barter component of its payments for Turkmen gas. This
goal seems more difficult to attain, now that Russia has agreed to
eliminate that component from its pricing arrangements with
Turkmenistan.
(Interfax, Turkmen TV Channel One, April 15; see EDM, January 6, 12,
February 11, March 24)
--Vladimir Socor
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From: Baghdasarian