Kommersant was right...Bravo!

Kyrgyzstan closes Manas airbase, secures 2 billion of credit from Russia

When Presidents of Russia and Kyrgyzstan were negotiating behind closed doors yesterday night, Russian TV-channel “Mir” called this visit ‘one of the most important in Bakiev’s career’. As the results of the meeting were announced it was clear – very important outcomes indeed.

The biggest surprise was the decision to close the American airbase stationed at Manas airport just outside Bishkek. The airbase has been there since the beginning of military campaign in Afghanistan in 2001. The possible closing of Manas became a part of the media discourse in mid-January, but after the statements of U.S. Central Command chief General David Petraeus on January 19 pointing to the contrary, the intrigue surrounding the issue seemed to have come down.

Part of confidence that the airbase would stay came from understanding that American airbase in the region also corresponded with Russian interests in terms of stability in the region and bringing peace to Afghanistan. Moreover, just hours before the meeting NATO Special Representative for Central Asia and Caucasus Robert Simmons told “24.kg” that the issue was not raised during his talks with Kyrgyz officials.

Even though Bakiev promised that his country “will pass necessary procedures”, eviction of the airbase seems to be a difficult legal procedure. According to Bakyt Beshimov, leader of the Social-Democrat fraction in the parliament, the airbase was set up in the framework of multinational Operation “Enduring Freedom” and it would be necessary to reach an agreement with all the military partners.

A second important decision reached in Moscow is the agreement signed by countries on the construction of Kambarata-1 power station on the Naryn river, a project that would add to the Kyrgyz energy sector at the expense of the Uzbek agricultural sector. Tashkent has long been very negative on any project influencing its water supply through Syrdarya river.

Financing Kyrgyz initiatives in hydro energy construction was first discussed in December, 2008 at the meeting of Russian and Kyrgyz Premiers, Vladimir Putin and Igor Chudinov. Then Putin stated that such projects are viable and that they are of interest to Kyrgyz, as well as Russian businesses.

However, President Medvedev during his official visit to Uzbekistan on January 22-23, 2009, noted that “all such projects should be set up taking into account the views of neighbors.” Mr. Medvedev also noted that Russian Federation would step in as an investor only when a regional consensus has been reached. Well aware of the fact that Uzbekistan would hardly support such construction initiatives, local pundits saw this as Russia politely pulling out of the project.

One of the factors playing against Russian investments into Kyrgyzstan, according to Mr. Beshimov was Russia’s efforts to secure the flow of Central Asian gas and oil exclusively through Russian pipelines and the resulting unwillingness of Medvedev to spoil the relationship with one of the big exporters – Uzbekistan.

Added to these were economic difficulties in Russia itself – slowdown of the Russian economy and falling oil prices. In this view, news of a two-billion credit, distributed by RIA news agency, came as a big surprise. Terms and conditions of the credit have not been publicized so far. President Medvedev merely noted that part of the allocated money would go to support infrastructure projects, including Kambarata-1, and part – to support Kyrgyz budget.

Most likely, 300 million dollars were given as a lax credit under 0.75 percent for 40 years, and the rest went to support construction at Kambarata. In addition to this, Russia gave 150 million more in financial aid.

The parties settled the issue of Kyrgyz foreign debt to Russia (180 million dollars). However, it is not clear whether Kyrgyzstan in return gave up 48% of Dastan, a local strategic military manufacturer. If it turns out that Kyrgyzstan gave up part of Dastan this write-off might not have been a victory at all. According to MP Bakyt Beshimov, no one can adequately evaluate the deal unless the absolute numbers behind “48%” are publicized. It might turn out that almost half of the shares are much more expensive than 180 million.

Uzbekistan did not have time to react to the deal yet. Some statements may be made today by President Karimov at the sessions of the Collective Security Treaty Organization. Nevertheless, one thing is clear: in its current form the deal stroke by Kyrgyz and Russian Presidents does not satisfy resource-rich and water-poor Uzbekistan. .