Last week’s announcement of the decision to eject US troops from the Manas airbase in Kyrgyzstan coincides perhaps rather too neatly with the promise of $2.15 billion in loans and aid from Russia. Although President Bukiyev disputes that the two issues are linked, commentators and officials alike recognise that the current move against US interests is part of a much larger and ongoing power-play in the Central Asian republic. The severity of the circumstances is compounded by the President’s own attempt to increase his approval rating in the run up to elections, regardless of what the long-term impact may be.

The Manas airbase has been a regular source of controversy since it first opened in 2001. Just 650 miles from Kabul, Manas may be ideally placed for supplying troops to Afghanistan but its presence was always going to rile Russia, who still considers Kyrgyzstan and her Central Asian neighbours as her own backyard despite nearly 20 years of nominal independence. Calls in 2006 for the base to close were scotched when the US increased the value of its lease to $63m, but this still falls far short of the $200m the Kyrgyz government requested. The disparity in amounts provides Prime Minister Igor Chudinov with a useful justification for the latest round of pressure on Manas.

The first question we have to ask is why does Kyrgyzstan matter? It is a mountainous idyll, a land-locked country with a population of just five million. Unlike its neighbours of Kazakhstan and Uzbekistan, it has negligible fossil fuel reserves; a series of five hydro-electric power stations fed in part by rivers from China provide the majority of energy supplies. The economy is supported by contributions from Kyrgyz working abroad, loans from the World Bank and the IMF, and, perhaps most importantly in times of worldwide economic instability, the income brought in by the US and Russian airbases. One thing, however, brings Kyrgyzstan to the attention of foreign powers: its geo-political position.

Direct Russian influence in Kyrgyzstan has been felt since 1876 when the country became part of the Russian Empire. The country was made a full republic of the USSR in 1936 and only formally declared independence from Moscow in August 1991. The Russians previously trained all of their air force pilots in Kyrgyzstan and continue to keep an airbase in Bishkek; it’s just 20 miles from Manas. Large numbers of Kyrgyz are employed in Moscow, and Russian companies dominate Kyrgyz industry; the Russian-managed Komtor gold mine single-handedly contributes 10% of Kyrgyzstan’s GDP.
Whilst Eastern Europe has fallen sway to the influence of the EU, Central Asia is still a region in which Russia can have an impact. Therefore, the proposed package of $2 billion in loans and $150 million in aid is as important for the area as a whole as it is for Kyrgyzstan. The loans are to be repaid over a five year period at a rate of 3% above Libor which, although not unfeasible for a developed country, is nigh on impossible when we consider that Kyrgyzstan’s GDP (nominal) in 2007 was just $3.748 billion. Put simply, the Russians are offering a loan they’re confident cannot be repaid. What is more, a large portion of the loan is earmarked for the construction of dams controlling water supply to Uzbekistan. Once the Kyrgyz default on their loan, the dams will come under Russian control. This will require the Uzbeks to play ball with Russia as long as they want continued irrigation for cotton, their greatest agricultural export.

The other major player in Kyrgyzstan is, of course, the US. The Manas airbase is home to 1000 military personnel and serves as the primary hub for air operations in Afghanistan. With the withdrawal of troops from Iraq, the US has a single-point of military focus: Central Asia. Success in Afghanistan, the prestige which would come from succeeding where the British and Russians have historically failed, and the subsequent reconstruction programme required for future stability will all depend on a reliable supply route for men, munitions and other goods. Whilst relations with Iran and Pakistan are a little less than rosy, Kyrgyzstan is the most convenient and stable of the alternatives.
The US also runs a 160-man embassy in Kyrgyzstan – a huge number of representatives considering the size of the population. Across Central Asia the US is running a beneficial hearts and minds campaign through grass-roots education and development projects to counter-balance the influence of Russia, particularly when it comes to the control of gas and oil. While Gazprom has to date dictated the supplies of Central Asian gas to Europe through its Caspian Sea pipelines, the US is now backing the EU’s proposal to build the $10.19 billion Nabucco pipeline from Azerbaijan and Turkmenistan, through Turkey and the Balkans to Central Europe. Permission to build the pipeline, not to mention the ability to secure its supply, depends upon convincing local governments to support Europe’s interests over those of Russia. This is no mean feat.
In the short-term there are two likely outcomes to the dispute over Manas: the Americans will be forced to leave Kyrgyzstan or, more likely, the Kyrgyz government will use the threat as a bargaining chip to secure higher rent on the base. The reprieve will no doubt come at the 11th hour to force the best deal and to imply to the rest of the world that, however it may seem, Kyrgyzstan’s political hands are not tied by economic necessity. To retain a level of independence, the Kyrgyz government needs to balance the influence of competing foreign powers within their territory; no one party can be allowed to exert sole control or Kyrgyzstan will be reduced to the role of a pawn in far-reaching games.

In the longer-term, creating equilibrium among foreign powers will enable the Kyrgyz government to capitalise on external contributions to infrastructure, such as the American University and library and teaching programmes, allowing the country to stabilise and develop to a point where it is no longer entirely dependent on foreign aid. Turkish and Kazakh banks are already investing heavily in Kyrgyzstan, working with Kyrgyz partners to increase the number of branches and the amount of money on deposit. If this kind of growth can be maintained, Kyrgyzstan may well be able to position itself as the financial centre of Central Asia; its central location, the co-existence of black and white economies, and the relative stability of the financial system all count in the country’s favour, potentially earning it the moniker of the Switzerland of the east. Only once Kyrgyzstan has broken free from financial reliance on others can the country and its people decide upon and begin to pursue their own political, economic and social agendas.
Sophie and Max