Wednesday, 26 June 2013

Kyrgyzstan's Decision To Renounce Manas Transit Center Favors Russia

Published in Analytical Articles

by Erica Marat (06/26/2013 issue of the CACI Analyst)

The Kyrgyz parliament has voted to support President Almazbek Atambaev’s decision to renounce the contract for the U.S. transit center at Manas airport. The main reasons for the parliament’s vote were primarily a response to the Kremlin’s decision to write off a large chunk of Kyrgyzstan’s debt and to Moscow’s promise to construct hydropower plants in Kyrgyzstan, as well as to Washington’s abrupt decision to dismiss criminal charges against Maksim Bakiev, son of former president Kurmanbek Bakiev. In the meantime, uncertainty lingers regarding the finality of the parliament’s decision and how the president will proceed with his plan to build an international transit hub at Manas once the U.S. leaves.


BACKGROUND: On June 20, the Kyrgyz parliament unanimously voted to support President Atambaev’s decree denouncing the agreement with the U.S. regarding the Transit Center at the Manas airport. The original deal was made shortly after the September 11, 2001, terrorist attacks in the U.S. Atambaev’s call to shut down the base by July 2014, when the current contract expires and NATO forces are scheduled to leave Afghanistan, has been consistent since he was elected president almost two years ago. Atambaev plans to replace the facility with a commercial international hub.

Until recently, MPs indicated that the president’s initiative would fail in the parliament because MPs regard the U.S. military presence as an important lever against Russian and Chinese political pressure. A series of events over the past two months, however, changed the mood in parliament. First, in early May, the U.S. Department of Justice abruptly dropped a criminal case against Maksim Bakiev without explanation. According to Kyrgyz government representatives, the news came as a surprise and Bishkek was not briefed ahead of time. Former members of the opposition to Bakiev now in parliament, as well as members of the incumbent administration, had hoped that the U.S. would help extradite Maksim from the UK to U.S. to face trial for financial crimes.

Furthermore, MPs and government officials point to Russia’s promise to build the two giant Kambarata hydropower stations on the Naryn River in Kyrgyzstan. The project’s future is uncertain. If constructed, the production costs for both stations will exceed revenues, unless the energy sector is reformed and electricity tariffs are raised in Kyrgyzstan. The plants are also likely to escalate tensions with neighboring Uzbekistan, which depends on Kyrgyzstan’s water supply in the summer months. Kambarata hydropower stations would help Kyrgyzstan better control water release to downstream neighbors.  

Finally, last month Moscow agreed to write off US$ 500 million of Kyrgyzstan’s debt, a move welcomed by the parliament in Bishkek. Russia has recently deployed other forms of pressure as well. Kyrgyzstan has been coerced into joining the Russian-led Customs Union by 2015, despite strong resistance from entrepreneurs inside the country. 

If the U.S. transit center leaves, Kyrgyzstan’s US$ 1.7 billion national budget will lose US$ 60 million in annual rent. The economy as a whole will lose another US$ 200 million of various spending associated with Manas. In 2011, Kyrgyzstan’s budget received US$ 150 million in connection to the transit center. First Vice-President Joomart Otorbayev has raised concerns about the potential costs should the base shut down. MPs, in the meantime, have begun to look for ways to close the shortfall, such as increasing taxes for items like cigarettes and alcohol. But similar to the president’s short-term thinking about Manas, parliament voted to oust the U.S. base without having a clear idea about how to mitigate the economic damage.

This is not the first time that Bishkek has told the U.S. base to leave. In February 2009, Kyrgyzstan’s then-president Bakiev announced that he would shut down the U.S. base, but changed his mind four months later. In the meantime, he received US$ 300 million of a US$ 2 billion loan promised by Russia in return for expelling the base. Maksim Bakiev reportedly spent the Russian funds in the international market. Maksim also allegedly benefitted from fuel supply contracts to Manas. Bakiev was able to renegotiate the agreement with the United States in 2009, increasing Washington’s annual rent from US$ 17 million to US$ 60 million. Following Bakiev’s about-face, the Kremlin-controlled Russian-language media in Kyrgyzstan blasted the president, fueling unrest among Kyrgyz opposition leaders and regular citizens, leading eventually to his overthrow. 

IMPLICATIONS: There is widespread uncertainty about the future of Kyrgyz-U.S. relations should the transit center close. It is quite possible that the parliament will change its stance regarding the base yet again. The shift might occur if the president changes his position, or if any other politically significant issue, such as the Maksim Bakiev case, emerges between the U.S. and Kyrgyzstan. There is an understanding among some government officials and MPs that the U.S. will have to take the lead to recover its relationship with Bishkek after the base leaves. This attitude reflects a widespread perception that Kyrgyzstan’s consent to host the base for over a decade has been an act of political goodwill. There are also discussions among analysts whether the U.S. is ready to re-negotiate the deal with the Kyrgyz government as it did in 2009, a possibility that U.S. experts consider as highly unlikely.

Kyrgyzstan’s decision to shut down the base shifts Bishkek closer to Russia. Indeed, Atambaev’s administration issued the decree days before Russian President Vladimir Putin suddenly decided to visit Bishkek to attend a Collective Security Treaty Organization summit. Atambaev, who is unlikely to benefit personally from financial inflows associated with the base, sees the U.S. military presence as a destabilizing factor in the country. The president is wary of the negative repercussions the base might trigger in the future. For the president, the decision to expel the U.S. military seems to provide a political shield from another political uprising during his tenure. During his visit to Bishkek, Putin promised to fill in the financial gap left by the American military presence through Russia’s airbase in Kant. The Russian leader reiterated that it was Kyrgyzstan’s own wish to invite the Russian military onto its territory as a response to the growing threat of terrorism. To date, the Kremlin-controlled media in Russia and Kyrgyzstan have consistently covered Atambaev in a positive manner.

The feasibility of President Atambaev’s plans to launch an international transit hub at Manas is also uncertain. The president has yet to clarify where he will secure funds to build the facility, who will use the hub, and what type of cargo will pass through it. Finally, the president has been keen to emphasize that he will not allow any U.S. military presence at Manas, but will NATO aircraft still be able to use the hub to refuel? Atambaev’s administration seems to expect that some third party will emerge to build the hub out of political, not economic, calculations. 

Atambaev likely hopes that Turkey will participate in the transit hub project. His good personal relations with Turkey’s President Abdullah Gul have promoted stronger cooperation between the two countries. In 2012 Turkey allocated US$ 106 million in credits and grants, while Turkish airlines has opened two additional flights to Kyrgyzstan, one to Mongolia (with a layover in Bishkek) and one connecting Osh and Istanbul. Atambaev’s first foreign visit as a president was to Turkey in early 2012, demonstrating his personal and political alignment with Ankara.

As the president proceeded with his plan to cancel the Manas agreement, some MPs seemed not to know what exactly the parliament’s role would be regarding Atamabaev’s initiative. The few MPs who continue to oppose repudiating the agreement said they feel like they cannot influence the debate about the U.S. military presence because the decision has already been made.  

CONCLUSIONS: As the fate of the U.S. base at Manas was decided in the president’s office and confirmed in the Kyrgyz parliament, factors unrelated to Kyrgyz-U.S. relations came into play. Russia’s pressure to oust the base and the Maksim Bakiev case have convinced many MPs that the Manas base no longer offers political benefits for Kyrgyzstan. As the decisions are taken, MPs, Kyrgyzstan’s expert community, and the wider public still expect the U.S. to bargain for its interests, as it did in 2009. Whether this is a realistic expectation is not part of the discussion in Kyrgyzstan, and this apparent blind spot reveals some of the lasting asymmetries in the perception of Bishkek’s value to Washington.

AUTHOR’S BIO: Dr. Erica Marat is a Central Asia expert and a Nonresident Research Fellow with the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center.

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