Oksana Antonenko, Senior Fellow and Director of Russia/Eurasia Programme, IISS
Kathryn Pinnick, Researcher and Programme Coordinator, Russia/Eurasia Programme, IISS
Just over a decade ago, 12 western Siberian regions of Russia were transformed into border regions. Since December 1991, they have been assuming – under their own initiative, or by default in the absence of effective federal policies – an increasingly prominent role in Russia’s foreign, economic and security policy towards the wider Central Asian space. In April 2003, in Omsk, during a summit between Russian President Vladimir Putin and Kazakhstan President Narsultan Nazerbayev, the border regions were referred to as ‘locomotives’ for integration between the two countries, as well as between Russia and other Commonwealth of Independent States (CIS) states in Central Asia.
However, the Siberian border regions are facing a dilemma: how to keep their borders open to trade yet closed to soft security threats, such as drug trafficking and illegal migration, which originate in Afghanistan and Central Asia. For Russia’s central government, the quandary is even more complicated: how to implement two key objectives of its foreign policy: accelerated economic integration both with Europe and within the Eurasian Economic Community (EEC). The European Union (EU) made it clear that no visa-free regime for Russia will be even considered until its longest borders with Central Asia are secure. At the same time, closing Russia’s border with Kazakhstan by installing modern infrastructure remains exhorbitently expensive and introducing a visa regime with Kazakhstan will have a negative impact on legitimate trade, which was down by 11% in 2002 compared with 2001, and would further weaken Russia’s influence in Central Asia. In this situation, much depends on the capacity of Russia’s border regions to meet Russia’s economic and security objectives towards Central Asia.
This introductory paper and other papers in the volume examine political, security and economic issues facing western Siberia and wider Central Asia. Many are prepared by Russian regional scholars and policymakers, and some by academics in Central Asian states. They represent a valuable contribution to the current policy debate taking place across the region and among experts on Russia and Central Asia in Asia, Europe and the US.
Russia’s unstable southern neighbourhood
At present, western Siberian regions share a 6,500-kilometre border with Kazakhstan and have frontiers with China and Mongolia. Wider Central Asia encompases a vast territory with ethnically and religiously diverse populations and increasingly unstable states. These include, predominantly, the five former Soviet republics and newly-independent states: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The post-Soviet transition in these countries has been characterised by economic decline, slow democratic reform, leading to weak and autocratic states, a high degree of corruption and crime (primarily linked to drug trafficking from Afghanistan), and the radicalisation of opposition and extremist Islamic groups, which are increasingly prepared to use terrorism to achieve their political objectives.
In addition to the former Soviet states, two other regions are often incuded in the wider Central Asian space: the western part of China (Xinjiang Uighur Autonomous Region (XUAR)) and the western part of Mongolia (Bayan-Olgiy region). Both are inhabited by predominantly Muslim Turkic populations, which are locked into difficult relationships with the respective central governments in Beijing and Ulan-Bator. Furthermore, some Uighur groups promoting secession from mainland China are now operating in a number of Central Asian states, including Kazakhstan and Kyrgyzstan.
Further south the region borders Afghanistan, which, due to its ethnic composition in the north, with large Tajik and Uzbek populations, and due to its historic ties with the rest of Central Asia, is often seen as being part of the region. Throughout the 1990s, Afghanistan has been a major source of instability in the wider Central Asian region. The civil war threatened to spill over to Central Asia. Moreover, Afghanistan’s Taliban regime offered a safe haven to terrorist groups like al-Qaeda, which provided training and other assistance to radical Islamic terrorist groups operating in Central Asia. One of them, the Islamic Movement of Uzbekistan (IMU), was responsible for two insurgencies in Kyrgyzstan and Uzbekistan in 1999 and 2000. Finally, Afghanistan was a primary source of ‘soft security threats’ like illegal migration, drug trafficking and small-arms proliferation. Following the al-Qaeda terrorist attacks on New York and Washington DC on 11 September 2001, the US-led military campaign against the Taliban and al-Qaeda has transformed the situation in Afghanistan. While it has significantly undermined the terrorist infrastructure in Afghanistan and ended the civil war, it has not yet brought long-term stability to Afghanistan.
For the wider Central Asian region, the US-led military campaign has diminished the immediate cross-border terrorist or military threats. Moreover, the US-led campaign has provided cover for Central Asian states themselves to crackdown even harder on the political opposition and suspected terrorist groups. Finally, the EU, Russia and the US, as well as international organisations like the Organisation for Security and Cooperation in Europe (OSCE) and the United Nations (UN), are now working with Central Asian states to combat drug trafficking and other security issues. However, long-term stability in Central Asia will continue to depend on four key factors:
long-term international commitment to bringing stability to Afghanistan;
the ability of Central Asian states to overcome economic crises and to attract foreign investment;
the success of domestic political reforms, which could produce, simultaneously, more democratic and stable governments; and
the political will of leaders in Central Asia and Eurasia to promote effective regional integration in order to address regional political, economic and security challenges.
The role of border regions
The importance of Russia’s border regions for its relations with wider Central Asia derives from a number of factors. The first, and the most important, encompasses Russia’s security concerns. Many security threats in Central Asia come from Afghanistan (terrorism or internal armed conflict), or are generated within Central Asia itself (inter-state tensions over borders and water resources). These are not directed against Russian border regions but against Central Asian regimes. Nonetheless, the continuing presence of these threats undermines opportunities for regional stability, development and integration and, therefore, challenges the prospect of the Siberian regions’ economic revival. This means that Russian border regions will have to depend on their own natural resources and on cross-border trade with neighbouring states. Not only does western Siberia’s border with Kazakhstan remain poorly protected and even barely demarcated, but the other borders between Central Asian states remain porous – bilateral agreements on delimitation are still to be reached – and a cause of inter-state tension. Due to poor border security in the territories between Russia’s southern regions and Afghanistan, the western Siberian border regions have been transformed into the front line against a variety of new security threats, ranging from drug trafficking to smuggling and illegal migration. The prominence of the security dimension in Russia’s policy towards Central Asia has been reinforced by the global ’War on Terror’, in which Russia is assuming an active role, focusing primarily on its sourthern border areas.
The second factor that makes western Siberian regions important in Russia’s overall foreign and security policy is economic interest. According to Russian sources, 60% of Russian trade with Kazakhstan is cross-border trade. The figure might be even higher if one includes the shadow economy, plus semi-legal shuttle trade. Similarly, a large proportion of Russia’s bilateral trade turnover with Mongolia and eastern China is cross-border trade with the Siberian regions. The development of trade is likely to be reinforced in the case of Kazakhstan, Kyrgyzstan and Tajikistan by the long planned, but as yet incomplete, free-trade agreement, advocated by the EEC. Cross-border trade not only has an important impact on regional economic development in Russia and the bordering regions of Kazakhstan, but it is also helping to promote regional integration, which, on the political and security level, is hampered by the complex geopolitical environment in Central Asia. At the same time, Russian border regions have been one of the few powerful actors in Russia to promote, largely due to economic interests, a more active and constructive policy by Russia towards Central Asia. Western Siberia is clearly in a unique position compared with Russia’s other border regions. Russia’s northwestern regions, by contrast, are playing a more passive and protectionist role, doing little to promote a more active federal policy towards the enlarging EU and North Atlantic Treaty Organisation (NATO) on their doorstep.
The third factor that provides western Siberian border regions with more influence over Russia’s foreign and security policy towards a wider Central Asia is western Siberia’s unique historic, ethnic and human ties with the region. Altai region in western Siberia was the spot from where Turkic tribes originated and later spread across Central Asia and the Middle East. During the Russian and Soviet imperial era, large ethnic communities of Kazakhs, Tajiks and other groups settled in territories that are now border regions within the Russian Federation. Moreover, in the mid-1990s, many ethnic Russians from Central Asia chose to resettle in western Siberian regions. Historic ties and recent migration made western Siberia regions uniquely well-prepared, again unlike Russia’s northwestern regions, to help develop and, in some aspects, lead, Russia’s policy vis-а-vis its neighbours. In a number of regional universities, such as Altai State (Barnaul), Tomsk, Novosibirsk and Omsk, there are active research programmes on Central Asian-related issues. Similar research barely exists in the leading universities in Moscow and St. Petersburg, where many Russian diplomats and policymakers receive their education.
Given these three factors, western Siberian regions are likely to consolidate further their role in Russia’s overall policy towards Central Asia. This prominence does not represent any threat to the authority of the federal centre in Moscow because it does not threaten Russia’s territorial integrity, it compensates for the ineffective and military-dominated policy of the federal government towards Central Asia, and it preserves Russia’s influence in the region by means of relatively limited resources. However, this role is hampered by:
federal reforms introduced by Putin that promote over-centralisation without acknowledging the special position of border regions;
the low effectiveness of regional organisations that Russia promotes in wider Central Asia, which do not pay adequate attention to border security and cross-border economic policies; and
the inherent economic weakness (even backwardness) of western Siberian regions compared with other regions of the Russian Federation.
Central Asia in Russia’s foreign and security policy
Since the end of the Soviet Union, Russia’s security-policy priorities have been gradually shifting from the west to the south. This change is even clearer under Putin, who, on the one hand, has normalised Russia’s relations with NATO and has promoted a path towards Russia’s pro-Western orientation and integration into Western institutions, and, on the other, has taken a historic decision to support the US military presence in Central Asia.
Even before Putin took office, Russian political and military élites believed that, in the medium and long terms, Russia would face major security threats that were likely to emanate from the increasingly unstable and economically weakened regions along its southern border. In addition to the Caucasus, which has been severely destabilised by Moscow’s brutal war in Chechnya, Central Asia has become the second major security concern. Putin has been paying increasing attention to soft security threats from the Central Asian region, particularly drug trafficking. Only under Putin, though, have these concerns been clearly reflected in Russian military doctrine, which was issued in April 2000, as well as in a new version of the National Security Concept, due to be released in 2003. These documents have formed a foundation for changes in Russia’s security policy and defence-reform programmes. Furthermore, they prompted active diplomatic efforts by Russia to promote regional integration in Central Asia, though the CIS Collective Security Treaty and the Shanghai Cooperation Organisation (SCO). And they shifted priorities and resources for improving Russia’s border security towards Russia’s Central Asian borders (and, therefore, the western Siberian regions).
Russa’s security-policy priorities towards a wider Central Asia fall into three categories: soft security threats and border security; preventing proliferation of terrorist groups in and around Central Asia; and preventing inter-state conflicts and the emergence of failed states in the region.
The main strategies chosen by Russia to achieve these objectives include:
Strengthening its own borders and where possible strengthening the external borders of Central Asian states to combat soft security threats and terrorism.
Russian forces are still providing reinforcement to Tajiks guarding the external borders of Tajikistan. Russian troops are present in Kyrgyzstan. In 2003 Russia and Kyrgyzstan signed an agreement on establishing a Russian military base at Kant airfield, which will be part of the CIS Rapid Deployment Force (RDF) with a mandate to promote regional security, including collective protection against terrorism. In 2003, during his summit with Nazarbayev, Putin proposed closer cooperation between Russian and Kazakh border authorities to defend Kazakhstan’s external borders, as well as joint guarding of the Kazakhstan–Russia border. No clear agreement has yet been reached on this.
The second trend in Russia’s security policy (which, again, Putin has reiterated recently) involves reinforcing Russia’s long-term military presence in the member states of the Collective Security Treaty Organisation in Central Asia.
This trend emerged in 2000 when Russia initiated the establishment of the RDF with the aim of using collective defence to counter external terrorist threats, such as the IMU insurgencies that took place in 1999 and 2000 in Kyrgyzstan. However, until 2003, the RDF did not function as a standing force, but included specially designated divisions from all CST members, which were permanently stationed on their own territories. Only in 2003, at the CST summit in Dushanbe, which transformed the CST into the Collective Security Treaty Organisation, did Russia secure agreement to expand its military presence in the Central Asian states. In addition to establishing the air base at Kant, Kyrgyzstan, Russia is negotiating a long-term agreement with the government of Tajikistan on changing the status of its 201 division into an official Russian military base. This reinforcement of the Russian military presence in Central Asia comes in response to growing security concerns, as well as geopolitical concerns, since US and other NATO states established a presence in Kyrgyzstan and Uzbekistan to support the US-led Operation Enduring Freedom in Afghanistan. If the Russian armed forces require additional reinforcements, then reservists will be called up for military service from western Siberian regions which are part of the merged Urals and Siberian military districts.
The third strategy is to promote information exchange and intelligence- sharing on potential terrorist threats.
In 2000, Russia promoted the establishment of the CIS anti-terrorist centre in Bishkek, Kyrgyzstan, which supports the activities of the RDF. Bishkek is also home to the anti-terrorist centre of the SCO. Such information exchange within the CIS and the SCO is complemented by increasingly active cooperation between border guards and law-enforcement agencies from Russian and Kazakhstan border regions. So far, however, no such cooperation exists on a multilateral basis, involving similar structures from other Central Asian state.
The fourth strategy adopted by Russia to counter security threats emanating from Central Asia is to promote greater cooperation and burden-sharing with non-CIS actors, including the US, as well as the UE, NATO, the OSCE and other multilateral institutions.
Putin initiated this strategy after 11 September, when he voiced support for the US-led military campaign against the Taliban and al-Qaeda in Afghanistan and endorsed the establishment of US and coalition military facilities in Central Asia, albeit on a temporary basis. Russia provided practical support to the US-led coalition in terms of information sharing and through military assistance to the Northern Alliance. Following this initial cooperation, Russia and the US have discussed Central Asian security at practically all of their summits. On the ground in Central Asia, though, US and Russian troops continue to maintain a parallel presence with minimum practical cooperation as far as Central Asian security is concerned. Military élites in Russia still view the US military presence in Central Asia as a potential threat and a geopolitical challenge to Russia and thus are not keen to initiate practical cooperation. Putin has been insisting that the US and its allies withdraw their forces once the military operation in Afghanistan is over. This appears unlikely, given that NATO will be taking over from the International Security Assistance Forces (ISAF) in the second half of 2003 indefinitely. This could potentially provide an opportunity for establishing cooperation under the auspices of the Russia–NATO Council, although there has not been any discussion on this.
At the same time, the US has been providing support for strengthening Russia’s border with Central Asia under the Department of State-managed Technical Assistance Program for reducing proliferation threats. Some modern equipment has been supplied, although it is inadequate for dealing with all potential vulnerabilities. At the same time, the EU has failed to provide technical assistance to the Central Asian border infrastructure, investing instead in border security in the new EU member states on Russia’s western flank.
Cross-border cooperation strategies
Cross-border cooperation between western Siberian regions and their counterparts in neighbouring Central Asia, China and Mongolia is taking place on different levels: supranational, national, intra-federal and micro. New vehicles for regional collaboration are emerging and older ones are being redefined.
Multilateral integration
Moscow’s goals are to maintain a single economic space with Central Asia and to protect Russia’s security interests on its southern border. Since the break-up of the Soviet Union, Russia has been a leading player in multilateral organisations such as the CIS, the Collective Security Treaty, the EEC and the SCO. Yet these organisations are not living up to their potential or meeting expectations, which has even led Siberians to call for new international organisations in their part of the world. The Strategy for Siberia’s Development advocates economic cooperation in the macro-region of the CIS and the Asia-Pacific region as a strategically important policy goal. It believes that this objective would be helped by a multilateral institutional organisation, such as the Association of South-East Asian Nations (ASEAN) or the Asian Pacific Economic Cooperation (APEC) Forum, or a cross-border integration project like the Euro-regions or Greater Altai, which is discussed below, but on a much larger scale.
Many regional organisations exist, but all have a different membership (see the chart in fact file) and none encompass all of the states of the region. Several of these institutions have both a security (military) and economic-cooperation dimension and are directly relevant to the problems of Siberia’s border regions – for instance, border matters, free trade and customs issues and migration. The SCO is a particularly relevant regional body for western Siberia, since neighbouring China is a member of it. During its summit meeting in St. Petersburg in May 2001, the SCO adopted a Charter that stipulated that the organisation would expand its remit to cover economic cooperation, in addition to dealing with security issues like terrorism and extremism.
The EEC is considered the most successful of the inter-regional bodies with a real prospect of being an effective vehicle for cooperation. Established in October 2000, it emerged from the Soviet integrated economy as the Customs Union and was renamed the Eurasian Economic Community in May 2001. Its member states are Kazakhstan, Kyrgyzstan, Russia and Tajikistan (plus Belarus from outside the region), which together incorporate 180 million people. Its ultimate aim is a lofty one: to be the eastern equivalent of the European Union, with transparent borders and the free movement of goods. The EEC is not exclusively concerned with economic issues, it is also addressing border policy matters, such as economic migrants. This expansion of the policy remit is facilitated by overlapping membership with the Collective Security Treaty (Armenia is only in the security body, not the economic one).
There are a number of obstacles hindering the effectiveness of the EEC. Some EEC members have other obligations, as part of their bid to join the World Trade Organisation (WTO), and Kyrgyzstan has obligations as a member of the WTO. Furthermore, enforcement of a free-trade area would immediately result in negative consequences in the form of lower tax revenues paid to the federal and regional budgets, while the long-term economic benefits are not yet apparent. Free trade will affect the personal economic and business interests of many powerful élites, which continue to influence policymaking.
In other words, it is proving a challenge for the international organisations in Central Asia to find a balance between collective and national interests. Like the EEC, the CIS has a very poor record of enforcing collective decisions due to the unwillingness of the newly independent states to transfer some of their hard-won sovereignty to supra-national bodies. To address concerns that Russia was dominating the body and decision-making, a weighted voting system has been adopted in the EEC. If member states stick to their agreement to cede some national decision-making functions to the collective organisation, it could open the way for further integration, expansion and institutional development.
Cooperation on the national level
A reflection of the ineffectiveness of the EEC is the predominance of bilateral links between the neighbouring states – both in the form of inter-state agreements – and between neighbouring foreign regions. Russian-Mongolian bilateral and regional links are back on track after almost a decade of limited interaction. The two governments agreed in 1998 on the need to liberalise the border-crossing procedures between their two countries, although the promised visa-free arrangement for the border regions’ residents has yet to become reality. In March 2002, Mikhail Kasyanov became the first Russian prime minister in over 30 years to visit Mongolia. He signed a consular pact and an agreement on border checks, as well as a protocol on economic and trade cooperation. The central governments of both Russia and Kazakhstan are now emphasising the importance of promoting closer cooperation between their respective border regions. At the April 2003 summit between Putin and Nazarbayev in the Siberian city of Omsk proposals were made to intensify joint efforts against drug trafficking, terrorism, international crime, illegal migration and human trafficking across the Russian-Kazakh border. Representatives of the Russian and Kazakh border regions attended the Omsk summit where their respective presidents advocated closer direct cooperation between the regions, marking a new trend.
Efforts on the local and regional level
In the 1990s, the Russian regions that border Central Asia had felt that a clear policy direction from the centre was lacking. These regions had existing links with the Central Asian states and neighbouring China and Mongolia, but their new status, following the break-up of the Soviet Union, as an external frontier of the Russian Federation brought new challenges – economic, political and security – for which they did not always have the experience, leverage or authority to address. In this period, the role of the regions in developing relations with Central Asian states was based on two trends. On the one hand, there was, de facto, as mentioned above, a weak federal centre, which was unable to implement effective policies towards the CIS as a whole and Central Asia in particular. On the other hand, there was, de jure, a deliberate devolution of powers from the centre to the regions through federative treaties between the federal entities (regions) and the centre. These gave the regions some powers to conduct foreign economic relations and even some elements of security policy too, such as convening meetings of Russian and Kazakh border guards.
The first trend meant that, for example, in the absence of effective infrastructure along the Russian border with Kazakhstan, it was up to border and law-enforcement officials on the regional level to develop strategies for dealing with cross-border smuggling, drug trafficking and illegal migration. The second trend allowed regional administrations and local businesses in border regions to promote cross-border trade and cooperation as a means of overcoming the economic crisis in their territories and to participate in lucrative privatisation deals on both sides of the border.
A positive element in this context of uncertainty over the rights of the Russian regions and Putin’s policy of centralisation regarding cross-border cooperation issues was that Russia’s neighbours were not discouraged from seeking closer political relations with Russia’s border regions. The only clear fact concerning the rights and obligations of the Russian regional administrations is that they are limited only by the constitution of the Russian Federation. It grants them the right to have direct contact with individuals and local regions of neighbouring states as long as this does not contravene federal interests and legislation. Russia’s new border regions are pushing for clarification of their rights and calling for special status (that is, increased rights) for international interaction. The federal government drafted a Concept for Developing Russia’s Border Regions in 2001, but it has no legal status and no practical significance. There is an inter-departmental commission under the Russian prime minister attempting to co-ordinate trans- and cross-border cooperation and a federal law on cross-border cooperation is due to be put to the government in autumn 2003.
Cross-border cooperation efforts by Siberian-wide institutions
The offices of the Ministry of Foreign Affairs in Siberia (located in Barnaul, Chita, Krasnoyarsk and Novosibirsk Omsk) deal predominantly with consular issues, such as consular support for Russian and foreign companies, and visa support for foreign nationals, but they also facilitate contact between the local authorities and foreign visitors. The Siberian Federal District has attempted to promote a greater inter-regional dialogue on cross-border relations and to improve decision-making procedures between regional authorities and the federal centre on matters related to foreign relations with neighbouring states, although there is little evidence of specific policy input. The Siberian Accord (Sibirskoe Soglashenie in Russian), an inter-regional association, is making a contribution to building relationships with neighbouring states, mostly in the area of economics and trade, seeking access for Siberian goods to foreign markets, improvement of trade relations, creation of favourable conditions for foreign investment and development of tourism. At the 2002 annual meeting of the Accord, the proposed new highway between Russia, China, and Mongolia via Siberia was discussed, as were measures to safeguard the Russian-Kazakh and Russian-Mongolian borders. The Governor of Altai krai, Alexander Surikov, stated that migration into the region should be encouraged, especially by Russian-speaking minorities from the former Soviet republics. The Accord discusses practical policy proposals with representatives of the neighbouring states, for example, by participating in bilateral regional cooperation committees, such as the Russian-Uzbek economic cooperation committee
Multilateral links between neighbouring regions
The ‘Greater Altai’ initiative foresees a multilateral integration project to cover the whole area around the Altai Mountains, which overlaps territory in China, Kazakhstan, Mongolia and Russia (see map). The agreement would be between regional authorities, but approval is contingent on political backing from the four federal governments. A step in this direction was recognition, in November 2000, by the Ministry of Foreign Affairs of the Russian Federation that the idea is not in contravention of Russian federal foreign policy and the national interest. At present, in their relationships with neighbouring states, all of the Russian regional administrations act on the basis of bilateral agreements. The Greater Altai project proposes harmonising relevant local legislation of the four bordering regions on a multilateral basis. This would accelerate economic links and people-to-people contacts and build on existing projects, such as ecological and environmental schemes that have already led to extensive cooperation on a three-way basis between Russian Altai, Xinjiang (China) and East Kazakhstan oblast, with Mongolia increasingly included.
The fate of the Greater Altai initiative is contingent on a range of local and inter-state political dynamics. Of the four partners, China has changed from an enthusiastic partner to a reluctant one, as its priorities have shifted. It now appears that China is unlikely to sign a four-way multilateral cooperation agreement. China’s interests were once primarily economic, but now they centre on security and territorial integrity. On the one hand, China is seeking to iron out differences in socio-economic development between its regions – and this encompasses investing in infrastructure development in western China, including Xinjiang. On the other hand, Beijing is sensitive about any external interest in Xinjiang or cooperation bypassing the Chinese central government. Therefore, its first political instinct is to discourage cross-border integration projects.
Russians, meanwhile, are divided into two camps: the nationalist and the rational. The nationalists are insular and evoke fears of ‘the Yellow Peril’ (increased migration from China, including via Mongolian territory), whereas the rationalists welcome immigrants into the dwindling Siberian workforce as an element of closer links on all levels.
Numerous conferences have been held on the topic of Greater Altai, but it is still a long way from reality. In 2003, within the realm of what is possible for this project, an international (four-party) coordination council was set up, entitled Our Common Home Altai which holds regular progress meetings. Ecological cooperation is the area where coordinated policy has been most successful. The development of a cross-regional economy and the harmonisation of legislation remain high on the agenda, but are more politically sensitive areas where the national interests of the four contiguous states make collective decisions harder to make. . The main factor that will determine the success or failure of Greater Altai is whether centre-led foreign policy (regarding security and trade) will bypass this regional initiative.
The economic challenges for Siberia and Central Asia
Throughout the1990s, economic relations played only a secondary role in Russia’s policy towards Central Asia. On the one hand, this was due to the economic crisis in Russia, which cut the amount of funds available to the Russian government for undertaking major economic projects in Central Asia. In this period, none of the economic projects under the CIS and later the EEC, including the free-trade agreement, came to much. On the other hand, Russia’s limited economic influence in Central Asia could be explained by the fact that Russia’s private-sector companies did not show much interest in Central Asia (except for the Caspian Sea region) in contrast to their interest in more lucrative projects in Western Europe or in western CIS states, such as Ukraine. Only after 2000, when the Russian economy started to recover, and Putin started to emphasise Russia’s economic interests, did Russia’s policymakers and private actors start to explore economic opportunities in Central Asia.
On the multilateral level, Siberia has not benefited from Russia’s membership of the EEC since the promised economic integration has not become a reality.. To date, the members have achieved a free-trade zone for some goods (60% of all tariffs have been agreed), but they have not met fully their obligations on the free movement of goods across borders. Trade turnover is falling and several key policies have yet to be implemented: the abolition of customs tariffs; cuts in taxes and other charges; and the simplification of customs procedures. Further economic cooperation is hindered by a number of factors:
differing levels of economic and social development in different states;
differences in national legislation;
Kyrgyzstan is a member of the WTO and thus cannot change its tariffs to bring them in line with EEC demands; and
regions are under pressure to raise funds for the local and/or federal budgets through tariffs.
Although these factors also impact on bilateral trade, Siberia’s regions have benefited from economic links between the Russian Federation and China, and Kazakhstan and Mongolia, such as the 1997 China–Russia bilateral agreement on strategic partnership. On the regional level, a number of agreements have been signed between Altai krai and Altai Republic and the XUAR. Altai krai’s increased interaction with Xinjiang would facilitate wider links between Siberia (and the Russian export market as a whole) and the Chinese market.
While overall trade between Russia and Kazakhstan has fallen over the past few years (it dropped by 11% in 2002 compared with 2001), trade between Siberia’s western regions and Kazakhstan regions accounts for 60% of total turnover. Trade agreements between regional and municipal authorities have provided the impetus for micro-level deals between Russian and Kazakh businesses. While this is a good example of a local initiative expanding both upwards (to the regional level) and downwards (to include more local businesses), such initiatives can, of course, be hostage to interference or policy changes from the federal level. In 1999, for instance, local-level trade was disrupted by the Kazakh federal government’s decision to ban imports into Kazakhstan of meat and dairy produce from Russian manufacturers.
Also on the micro level, political clout can go someway towards increasing the chance of success of trade deals. From its experience of organising a large number of trade fairs, exhibitions and meetings with foreign businessmen, Tomsk Chamber of Trade and Commerce has found that these events are far more effective if local government officials accompany the businessmen and sign bilateral agreements.
Russia’s trade in, and with, Asia is affected by the political and economic dynamics between Central Asian states. In the Soviet period, western Siberia was a market for goods from Kazakhstan and Uzbekistan, but these links were all but destroyed by the end of the Soviet era and in the ensuing years of economic collapse and transition to a market economy. A limited number of these links are now being re-established. Tractors made in Altai are once again being sold to Uzbekistan and the Altai region is importing foodstuffs from Uzbekistan. Western Siberia’s economy feels the impact of the unpredictable nature of the political and economic transition processes in Central Asian states. The recent closure of the Uzbekistan border with Kazakhstan (by Uzbekistan) affected the transit of goods from Tajikistan to Russia (cargo traditionally goes by rail via Uzbekistan). The transportation infrastructure is limited, which forces Tajikistan and Kyrgyzstan to sign agreements to find ways to bypass Uzbekistan. Tashkent took the decision to close the border irrespective of the Kazakh-Uzbek border agreement. The decision was aimed at preventing the shuttle trade, which flourished as a result of Uzbekistan’s multiple exchange rates and slow progress on currency liberalisation.
Shuttle trade by local residents is an important and widespread phenomenon in regard to micro-level economic activity across these borders. It is a by-product (sometimes illegal, sometimes not) of the transparent border, particularly the Kazakh-Russia stretch. Shuttle traders bring consumer goods into Russia from China by bus via Kazakhstan; much of this involves smuggling. It is a key source of income for local residents and they fear that the imposition of the anticipated stricter border regime to counter soft security threats will impact on their livelihoods. Western Siberia as a whole, however, would reap benefits from the curtailment of shuttle trade, since the import of consumer goods would shift from the black economy to the legitimate economy and generate tax revenue for regional budgets. Furthermore, small-scale entrepreneurs could redirect their efforts to establishing a regional market. Fortunately, businesses and regional administrations on both sides of the border want to cooperate rather than compete.
Economic cooperation would be facilitated by the joint development of infrastructure, joint exploitation of raw materials in border zones, and by resolving issues concerning shared water arteries (the rivers that run through China, Kazakhstan and Russia) and energy supplies. Poor infrastructure restricts the scale of trade between Siberia and neighbouring states. The volume of trade between western Siberian regions and neighbouring states has begun to increase over the past few years. However, chartered flights in and out of Barnaul have been used out of necessity in the absence of suitable roads and customs clearance facilities on the borders with China and Mongolia. Slow transport and customs checks cause such delays that foodstuffs, one of the main import–export goods, often perish in transit. The construction of new transport links (road, rail and air) from east to west and new customs posts and communication networks is underway and this should benefit Altai krai and Altai Republic. The majority of China’s trade with western Siberia is trans-border trade with inland cities, such as Novosibirsk, rather than cross-border trade with Altai krai and Altai Republic, which share a border with China. Similarly, Novosibirsk enjoys more trade with Kazakhstan than Altai krai does (although they both have borders with Kazakhstan). This is because of better transport and customs infrastructure in Novosibirsk. It is hardly surprising that the level of economic development of individual regions is closely tied to the dynamics of regional trade.
Economic differences along the border
Varying levels of economic development in the contiguous regions of China, Kazakhstan, Mongolia and Russia pose challenges to, but also present opportunities for, regional trade dynamics. The border regions of western Siberia are economically-backward compared with other Russian regions and mainly fall into the second two categories in the Ministry for Economic Development’s classification:
regions rich in raw materials and hence comparatively better off financially, such as Novosibirsk oblast;
regions which lack raw materials and the corresponding wealth and are classified as depressed, such as Altai Republic, Tuva Republic and the Republic of Buryatia;
other regions that are poor and economically-backward because their industrial base has collapsed, such as Omsk oblast, Chita oblast and Altai krai.
Altai Republic and Chita oblast border China; these two regions, as well as Tuva, Irkutsk oblast and Buryatia, border Mongolia; and Altai krai, Altai Republic, Omsk oblast and Novosibirsk oblast (the only so-called “financially well-off” border region) have a border with Kazakhstan. Siberia’s border regions are primarily economically weak with lower than average standards of living, high unemployment, low gross domestic product (GDP) per capita and low levels of foreign direct investment (see fact file). This is also true of Russia’s regions in the northwest, which border the enlarging EU. In contrast to the northwestern border regions, though, the Siberian border regions are much more developed economically than those of their neighbours. North Kazakhstan, western Mongolia and China suffer even lower standards of living and lack of investment. This disparity on the two sides of the border brings problems for Russia: by making its territory more attractive to migrants and vulnerable to criminal activities often associated with porous borders. Yet, despite their low levels of development and the fact that they have not attracted investment compared with other parts of Russia, the Russian border regions are economically stronger than their neighbours and capable of becoming active economic players on the other side of the border. The Russian border regions have resources (raw materials and labour) that are in demand by their neighbours.
The backwardness of the Russian border regions was recognised in the Strategy for the Economic Development of Siberia, which was drafted by academics and politicians from Siberia and federal organs in Moscow. After going through several versions and revisions, it was finally approved by the Russian Federation Ministry for Economic Development in June 2002. The document points out that economic development is contingent on cooperation with the neighbouring states, particularly federal inter-state-level cooperation. Within an institutional framework, joint projects in the areas of trade, ecology, labour and infrastructure should be implemented. This policy statement does not go so far as to consider what the implications – in terms of security, trade and demographics – could be of the widening economic gap between the Russian regions in question and the neighbouring regions of Kazakhstan and other Central Asian states (with which there is an even greater disparity). It does make a link between the current socio-economic condition of the border regions and the economic potential of Siberia (particularly the western border regions) as a gateway to Central Asia and China. One of the key goals outlined in the strategy is to expand Siberia’s foreign trade with the CIS, especially Kazakhstan.
The scenario for Siberia will be gloomy without intensified economic interaction with neighbouring states. This is one strategy that the Siberian regions, particularly the backward border regions, can adopt to boost their economies at a time when the federal centre is planning to cut subsidies and to push all of Russia’s regions into self-sufficiency. The Siberians fear that many of their factories will go bankrupt and that, subsequently, the outflow of people from Siberia will increase in the absence of any other developed industry or jobs (over the past decade more than 1.5m people have emigrated). One possibility is that only a few viable population centres will remain, and they will be along the route of the Trans-Siberian Railway (Novosibirsk, Krasnoyarsk and Irkutsk). Siberian enterprises that are distant from transportation routes will lose out – the competitiveness of their products currently suffers due to high transportation and energy costs. The Siberian strategy advocates reducing economic disparities between Siberia’s regions and diversifying their economies by encouraging less reliance on mineral resources (oil, gas, timber and metals), and by developing other sectors instead, especially high-technology and manufacturing industries. The border regions can clearly not rely exclusively on federal support to boost their development. Their potential to expand relations, certainly in the economic sphere, with neighbouring states also depends on appropriate alternative strategies.
Domestic factors and regional policies
Siberians believe that they get little in return for Moscow’s exploitation of Siberia’s natural resources, which provide 77% of Russia’s oil, 85% of its natural gas and 80% of its coal; Siberian raw materials account for 14% of Russia’s gross national product (GNP). The regions wish to receive a greater share of the mineral rents (revenues from the federal government for utilising Siberia’s natural resources). As a rule, Moscow sees Siberia as a drain on federal resources. Fifteen of the 16 regions are subsidised by the centre – Krasnoyarsk oblast is the only ‘donor’ region, which receives no subsidies. Some are in more need than others: for example, 90% of Tuva’s budget is transferred from Moscow (see fact file). The federal centre enjoys leverage through the distribution of subsidies. In light of this, Siberia’s regional governors are loyal to Moscow, not wishing to ‘bite the hand which feeds them’.
Putin has shaken up the relationship between the governors and the centre. One of his priority tasks was to introduce a new framework for federal relations to curb the decentralisation (independence for the regions as a result of individual direct agreements with Moscow) allowed under former President Boris Yeltsin. In order to reinforce vertical authority over the constituent entities of the Russian Federation – republics, oblasts and autonomous regions – the 89 entities (regions) of the Russian Federation were grouped into seven federal districts in 2000 and a presidential nominee appointed for each (as the president’s plenipotentiary). Putin’s federal policy has two main strands: first to control and coordinate the work of federal organs (regional offices of key ministries in each federal district); and, second, to create a unified legal space by bringing all regional legislation into line with federal legislation. This is necessary in order to address non-conformity between the regions – one of the legacies of the Yeltsin era – which Putin’s administration perceived as detrimental to the Federation per se. Putin’s federal policy has the problem of the division of power at its core, but, inevitably, it has been perceived as being aimed at limiting the regions’ rights.
There was obviously potential for resistance by the regions’ powerful governors to, if not conflict, with the arrival of the presidential plenipotentiaries . Leonid Drachevsky, Putin’s plenipotentiary in the Siberian Federal District, has been careful not to undermine the vested interests of the 16 governors in his remit. Nor have they criticised him publicly. However, some Siberian governors ignored meetings of the Federal District’s Council in the first year of its inception because they saw it as superfluous to Siberia’s already functioning regional coordinating association, the Siberian Accord. Drachevsky has voiced support for the Siberian Accord, but, at the same time, has tried to sideline it. However, in an apparent concession by the federal structure and recognition of the overlap in composition and, to some extent, function of the two bodies, for the past year joint meetings have been convened.
The political situation in the Siberian Federal District is stable; most gubernatorial elections have seen the incumbents re-elected (see table). Drachevsky has proven himself to be a skilful politician, wearing both the hat of Siberia and the hat of the federal centre. On several occasions, notably in the drafting of the Siberian strategy document, he championed Siberia’s cause with the federal authorities. For Siberia, the positive state of the relationship between the centre and the regions gives ground for optimism that Moscow will not limit border regions’ cross-border activity with neighbouring states. But, rather, that it will further devolve decision-making on local issues to them.
Conclusions
In Central Asia, the regional dimension in Russian foreign policy is particularly prominent in comparison to other parts of Russia. This is now understood by Putin, who until recently was reluctant to advocate a greater regional role in foreign economic and other relations. Now, western Siberian regions are seen as ‘a locomotive for regional integration’, rather than as obstacles. This is in contrast to other regions, such as Russia’s northwest, where knowledge of economic practices in the EU is limited, or in the Far East, where cross border co-operation is hampered by anti-Chinese feelings, which are being exploited by populist local politicians. The influence of western Siberian regions on Russia’s policy vis-à-vis Central Asia is derived from a combination of economic and traditional inter-community ties across the border.
Regional ties are limited to Russia’s immediate neighbours –China, Kazakhstan and Mongolia – while other Central Asian states –Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – are not so engaged in cooperation with Russia’s border regions and there is little interest on either side in expanding this level of cooperation.
Security issues will continue to dominate not only Russia’s policy towards Central Asia, but increasingly regional attitudes. Key concerns include soft security threats, which Russia is exposed to due to poor border security (including drug trafficking, illegal migration, epidemics and crime, which are particularly acute in Central Asia). Russia’s border regions remain poorly prepared to deal with soft security challenges and depend on the federal authorities for policy decisions and resources.
Economic relations are unlikely to flourish across Central Asia as long as security issues go unresolved. Several big policy questions, such as in relation to water and energy resources, touch on the security and national interests of the states in the region. Yet regional cooperation is essential if they are to be resolved and if national and collective economies are to prosper. Foreign investment will remain relatively small and limited to the commodity sector (oil and gas, for instance) for as long as economic and political risk is perceived to be high in the newly-independent states. It is clear that cross-border trade will remain the main foundation for economic integration. There is room for greater cooperation based on reciprocal trade arrangements, the sharing of raw materials and on the setting up of joint processing industries. In order to expand this trade beyond immediate neighbourhoods, extending it to cover other regional states, it is important to promote practical implementation of free-trade agreements, improve infrastructure and harmonise customs procedures and practices to facilitate efficiency and legality.
Relations between the centre and the regions in Russia are not posing problems that might affect the ability of the western Siberian border regions to promote cross-border ties. Furthermore, within the region itself, horizontal links are well developed thanks to the work of the Siberian Accord. However, there is still a need for federal instruments to promote actively regional engagement on a variety of cross-border issues. These are not just economic, but also political (such as the Greater Altai sub-regional integration process) and security related (maintaining the dialogue on border security and developing closer cooperation between regional law-enforcement bodies and promoting dialogue between non-governmental organisations (NGOs) and interest groups that are focusing on soft security issues, such as environmental threats (for example, Semipalatinsk and the Aral Sea), public health issues and the fight against drugs).
Throughout the1990s Russia’s relations with Central Asia developed with great difficulty and many contradictions – this was true in regard to Russia’s declining influence over all of its former satellite states in the post-imperial period. These contradictions were further reinforced by the arrival of US-led coalition forces in the region after 11 September and the emergence of a degree of geo-political competition between Russia and the US there. In order to achieve substantial progress towards regional stability new confidence-building measures are required. These should not be seen as part of Russia’s geopolitical rivalry with other external players nor should they be viewed as another form of ‘great-power’ pressure by Russia. Regional cross-border relations could offer such confidence-building measures. On the one hand, they are taking place on the local level and focus on projects that provide practical benefits to both sides, such as infrastructure. On the other hand, they put Russian and Central Asian actors on the same level, thereby promoting a model of equal partnership.
Russia’s regions can and should play a major role in Russia’s relations with Central Asia. Moreover, their experience should offer a framework for developing federal legislation on border regions and on the division of powers between the federal centre and the regions in the foreign economic sphere. This could encourage other parts of Russia to take a more active role in developing and implementing Russia’s policies towards its neighbours.
