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| Russia's President Vladimir Putin and Tajik President Emomali Rakhmon meet on the sidelines of an informal summit of the regional security group in 2013
As President Vladimir Putin strains to keep Ukraine within Russia’s grasp, he may be losing his grip on another part of his would-be empire: the former Soviet republics of Central Asia, which are increasingly turning toward China for investment and trade.
In the latest sign of its growing economic ties with the region, China is planning a $16.3 billion fund to finance railways, roads, and pipelines across Central Asia, reviving the centuries-old Silk Road trade route between China and Europe. President Xi Jinping first proposed the idea last year during a visit to Kazakhstan, the region’s wealthiest country.
Beijing has plenty of reasons to spend big in Central Asia. Improved infrastructure would help link China to European markets and give China increased access to the region’s rich natural resources. Kazakhstan is a major oil producer, while neighboring Kyrgyzstan has large mineral deposits and Turkmenistan produces natural gas.
At the same time, the planned construction would give an economic boost to adjoining areas of western China where Beijing is trying to quell a separatist insurgency, says Sarah Lain, a researcher at the Royal United Services Institute in London. As it has in Africa, China is likely to bring Chinese workers into Central Asia to do much of the construction.
During much of the 19th century, the Russian and British empires vied for control of Central Asia, a rivalry dubbed the “Great Game.” But the predominantly Muslim region, which also includes the countries of Tajikistan, Turkmenistan, and Uzbekistan, was annexed by the Soviet Union after the Bolshevik revolution and has remained close to Moscow in the post-Soviet era.
Putin has sought to maintain those ties—for example, by inviting Kazakhstan and Kyrgyzstan to join a customs union with Moscow. But with the Russian economy in a deep slump, he can’t match the big money that China is offering. Indeed, Russia’s economic malaise is clobbering some Central Asian economies, spurring them to seek help from China.
Take Tajikistan, one of the region’s poorest nations, where an estimated 52 percent of the economy comes from money sent home by migrant Tajik workers, most of them in Russia. Those remittances are now declining sharply, dragging down economic growth and increasing Tajikistan’s “vulnerability to shocks,” the World Bank said in a report last month.
Jamoliddin Nuraliev, the country’s deputy finance minister, told the Financial Times recently that China was prepared to invest $6 billion in Tajikistan. The figure hasn’t been confirmed by Beijing; if accurate, it would represent two-thirds of Tajikistan’s gross domestic product. Russia also is offering help to Tajikistan, but the sums are much smaller. Russian state news agency RIA Novosti reported this week that Moscow would give $6.7 million to aid rural areas of Tajikistan.
China has already built substantial economic ties with some Central Asian nations, including major investments in Kazakhstan’s oil industry and large purchases of gas from Turkmenistan.
Russia’s incursion into Russian-speaking areas of Ukraine has spooked some Central Asian countries, especially Kazakhstan, which has a large Russian-speaking minority. “There’s a degree of mistrust now with Russia,” Lain says. Although the region won’t turn its back on Russia, she says, “Right now China seems to be a more reliable partner.”
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Thursday, November 13, 2014
Putin Is Losing Out to China in Central Asia's Latest 'Great Game' (BusinessWeek)
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