As the Afghan war winds down, the United States, China and Iran are gearing up their competition for oil and gas pipelines in the region. China has shown interest in constructing a gas pipeline from its western Xinjiang province to Turkmenistan, for onward supply to Pakistan and India. Iran is contacting Pakistan later this month about its ambitious Iran-India project. Also this month, a high-level delegation of US Export-Import Bank, Trade and Development Agency (TDA) and Overseas Private Insurance Corporation (OPIC) officials are due in Islamabad to explore business opportunities, including oil and gas pipeline investment. And Kenneth Dam, Deputy Secretary of the US Treasury, will pay a week-long visit to Pakistan and India to discuss trade and investment.
The reason for all this activity is that Caspian region oil exports can reach 3.2 million barrels per day and gas exports 4,850 billion cubic feet per year by 2010, and a stabilized Afghanistan is expected to attract massive foreign investment in such projects during the reconstruction period.
The exploitation of Central Asian and Caspian reserves has long been an American dream. In the mid-1990s, a leading US company, Unocal, was courting Afghanistan's Taleban regime to lay a 1,600-kilometer gas pipeline from Daulatabad in Turkmenistan to Multan, Pakistan, and possibly on to India. The consortium led by Unocal, including Delta of Saudi Arabia, Itochu of Japan, Gazprom of Russia, Inpex of Japan, Hyundai of South Korea and Crescent of Pakistan, even discussed the modalities and financing arrangements for the US$2.5 billion project. CentGas, as the project was called, was expected to pump 700 billion cubic feet of gas per year. Another part of this project was a crude oil export pipeline from Chardzhou in Turkmenistan, via Afghanistan, to a terminal on Pakistan's Arabian Sea coast, with a capacity of 1 million barrels per day.
The Taleban factor forced the CentGas investors to suspend the project in April 1998. Both pipelines were intended to transit 700 km of war-torn Afghan territory. However, this project is again being seen as the most economical and commercially viable, as the oil and gas fields of Turkmenistan and Uzbekistan in the Amu Darya basin, and the Kumkol field in central Kazakhstan, could be connected to CentGas's proposed pipelines. Now the United States has shown its intention to provide Ex-Im Bank financing and OPIC political risk insurance for a commercial deal, while TDA would do the feasibility studies for the projects.
US companies had previously been working on transporting Central Asian oil and gas to Europe via Turkey, where energy demand is high. For this, the Baku-Tbilisi-Ceyhan pipeline for oil producers of Georgia, Azerbaijan, Kazakhstan, Turkmenistan and Russia was crucial. However, transporting all the Caspian basin's reserves through Azerbaijan and Russia would greatly enhance Russia's political and strategic clout, causing a shift of the strategic balance in favor of Russia, Iran or even China, which is still pursuing its own Kazakh pipeline project.
China has been quick to recognize the importance of such a huge oil and gas infrastructure project in the region. It signed a deal with Pakistan for the construction of the Gwadar deep port on the Arabian Sea, and in recent weeks has shown an interest in its own version of the CentGas project.
Some initial talks were held when the Pakistani petroleum minister visited Beijing in connection with the White Oil Pipeline Project, a Pakistani project with Chinese involvement in construction and financing. More talks will be held in coming months. China's Export-Import Bank has extended $120 million credit for the White Oil Pipeline, which will run from Port Qasim, near Karachi, to northern Pakistan, and meet 75% of Pakistan's oil transportation needs after completion. The construction contract was awarded to the China Petroleum Engineering and Construction Company, and work began in June 2001. Beijing has obvious concerns over the US military presence in Afghanistan and the Central Asian republics. It intends to outmaneuver the US by bringing Turkmenistan and Pakistan into its own "CentGas" project before the Western companies re-enter the market.
Iran, which is facing the wrath of the United States over alleged sponsorship of terrorism and support of warlords in Afghanistan, is also trying to revive the Economic Cooperation Organization (ECO), comprising Pakistan, Turkey, Iran, Afghanistan and the Central Asian states. Iran has officially approached Pakistan to formulate a joint strategy for Afghan reconstruction, and economic cooperation among ECO member countries. It will also formally start negotiations with Pakistan this month for the proposed $5 billion Iran-Pakistan-India gas pipeline project, which is expected to generate $500 million for Pakistan in the shape of royalties from India. Iran also hopes to lay pipelines from Central Asia to Iran for re-export to European and South Asian countries.
Pakistan does not object to any of these projects, as it needs energy for growing domestic consumption and pipelines offer competitively economic supply routes. The country's existing 23 trillion cubit feet of gas reserves, on current consumption estimates, will only last for another 22 years. Known oil reserves are just enough for 15 years. At present, Pakistan relies mainly on imported crude oil and diesel, and has only 19 days of strategic oil reserves. However, Pakistan has a good, extensive domestic gas pipeline network. The Government has tried to expand this further with the help of Kuwait Petroleum Corporation, Chinese, and International Finance Corporation financing. The aim is to extend the supply routes to thermal power stations, and, if a stable gas supply can be guaranteed, to switch these power stations from oil to gas. Similarly, a program is under way to switch vehicles from petrol to compressed natural gas (CNG), and almost 20% of all motor vehicles have already been converted. Pakistan now has the third-highest number of CNG vehicles in the world, after Argentina and Italy.
Pakistan's Ministry of Petroleum and Natural Resources is drafting a new law to establish an Oil and Gas Regulatory Authority and promote private sector investment. Private sector petroleum companies expect an increase in international investment in the energy sector, given the great interest in pipeline infrastructure. This, they say, will benefit Pakistan, and they are looking forward to Kenneth Dam's visit.
The US Treasury has announced that Dam will discuss trade and investment, with a message for both India and Pakistan to resolve their differences peacefully. India, which is averse to any oil and gas project going through Pakistan, may end its opposition if big US companies participate.
Since independence, Kazakhstan has evolved into a presidential republic. The extreme concentration of authority in the hands of the Head of State was explained by the need for rapid social, economic and democratic reforms during the transitional period. Now we have a super-presidential system. According to the Kazakhstan Constitution, the President of the Republic of Kazakhstan is the Head of State - the supreme official determining the main directions of its internal and foreign policies, the symbol of stability and state power in the country and of the inviolability of the rights and freedoms of the individual citizen.
The Kazakh President ensures the coordinated functioning of every state authority and the accountability of all the organs of power to the people. He can call regular or pre-term elections to Parliament. He signs bills submitted by the Senate for approval, or returns them for reconsideration. The President determines the structure of the Government, appoints Prime Ministers, some of the Senators, judges, the General Public Prosecutor, chairmen of the National Bank and the National Security Committee. He hands down tasks to the Government concerning the submission of draft laws to Parliament, cancels or suspends acts of the Government, approves state programs and the system of financing. He is the Supreme Commander-in-Chief authorized to declare martial law or to mobilize the population. Besides, the President issues decrees and regulations. His dignity is inviolable, and he cannot be brought to trial (except for high treason).
But can we say that all of the above has helped the country to achieve its planned goals? In the opinion of the Otan party, the Civil Party and the Agrarian Party, everything is indeed OK and we can expect a brilliant future under the wise guidance of Nursultan Nazarbaev. However, the Opposition does not share this optimism. The regime is exposed to severe criticism from orthodox communists on the Left and the Democratic Choice of Kazakhstan (DCK) on the Right.
Although these political forces differ on much of what they want to achieve, they have much in common with regard to what they dislike. The best proof of this was the DCK rally on January 20th. Groups of dissidents have periodically emerged from the power structures after Kazakhstan's independence, some of them being expelled from these structures by the regime. Yet just as the process of defining the President's powers was coming to an end, the number of dissidents in the power structures began to grow and the November 2001 political crisis broke out.
It turned out that Kazakhstan's stability during social and economic crises had been preserved by the elite's consensus. The political system that was created failed to prevent the dysfunction of Kazakhstan's social institutions. Therefore the first serious collision inside the power structure turned into a crisis. Representatives of the DCK have simply tried to voice loudly what many representatives of the power echelons hardly dare to mention: common rules of the game are needed, a level playing field.
The DCK proposed to the political system to evolve together with them in a direction favorable for the state, but instead of the proposed dialogue, the traditional process of expulsion occurred. The DCK members were squeezed out from power, like other dissidents before the DCK appeared. Then the DCK executed a couple of serious events with other opposition forces. This manifested the Opposition's possibilities, but frightened the authorities. An absolutely innocent person - Kasymzshomart - became the scapegoat, though he was personally super-loyal to the President. However, he failed to play the role of a lightning conductor! The authorities' "dialogue" consisted only of provocations and threats against the dissidents and of bribes to individual leaders.
In this case, using force is dangerous, especially to the authorities. The Public Prosecutor's request that the head of the President's administration should influence the Chairman of the Supreme Court testified to the complete degradation of the power structure. Even high-ranking officials of the state are unable to work within a legal framework. So what can be expected from others?
Moreover, many latent dissidents are ensconced within the power structure. Today they are keeping their mouths shut out of fear of reprisals. But who can guarantee the status quo tomorrow? The redistribution of authority at the political Olympus is an urgent necessity. Parliament and the Supreme Court should not be mere departments of the President's administration. They should play their independent roles. The executive itself needs radical changes. The Prime Minister should have a measure of real power.
Akims should undoubtedly be elected. Being legitimate, they can in due course function properly in their regions as is expected of them. Today, Akims of all ranks are puppets of the central authority. Virtually nothing has changed since their reshuffles. These reforms should have been carried out yesterday, but we are still being asked to postpone them until tomorrow.
It is often thought that conformist behavior guarantees freedom from failure. But what if the crowd you are part of is hurtling towards the abyss? Your instinct for self-preservation forces you to stop striding in that direction, to make your way to the safe roadside or, better still, to turn back from the abyss. Some people are trying desperately to cry loudly enough in their attempts to warn us that the abyss is already quite near. Yet they are ordered either to keep silent or to continue striding along obediently with the rest of us.
If a Japanese suggestion to use the Amudarya and Sirdarya Rivers for the agricultural needs of Afghanistan is approved, this will mean the actual elimination of the Aral Sea. To compensate for this, the Japanese have allegedly promised to direct money (previously appropriated to restore the Aral Sea) to the eradication of poverty in Priaraliye.
At present the Aral Sea is continuing to dry up. Annually, its level is reduced on average by 0.4 m in height, and its area and volume are decreasing by 1,000 m2 and 14 m3 respectively. Scientists and ecologists agree that even if the actual amount of water supplied to the Aral Sea is preserved we can expect three residual ponds of 20,000-25,000 m2 to appear in the near future. Tito Sizdikov, a Kazakh parliamentary Deputy, says that the drying up of the Aral Sea would cause desertification in the Priaralye region and may also lead to a global modification of the world's climate.