Kyrgyzstan’s economy unfazed by closure of Manas transit center: expert

Kyrgyzstan’s economy unfazed by closure of Manas transit center: expert

By Aynur Jafarova

Kyrgyzstan's economy will not be affected by the closure of the Manas transit center as Russia and China will support the country economically, Bruce Pannier, the expert on Central Asia and Senior Correspondent at Radio Free Europe/Radio Liberty told Azernews on January 13.

"Russia is about to provide Kyrgyzstan with some $1 billion in weapons and other military supplies and Russian companies are planning to spend hundreds of millions of dollars overhauling Kyrgyzstan's natural gas network and constructing the Kambar-Ata/Naryn Cascade hydropower project," the expert said.

Pannier also noted Russia puts pressure on Kyrgyzstan to close down the transit center as it doesn't want the U.S. to have a long-term presence in Central Asia, "a region Moscow still considers being within its sphere of influence".

China also doesn't want the U.S. military so close to its western borders, the expert stressed.

"China is planning to build a railroad through Kyrgyzstan, and other Central Asian states, and plans to build a new gas pipeline from Turkmenistan, through Kyrgyzstan, to China. Kyrgyzstan stands to make tens of millions of dollars annually in transit fees from that pipeline which should start operating in 2016."

Also, there have always been people in Kyrgyzstan who opposed having a U.S. base in the country. So, the Kyrgyz government's decision to accede to the wishes of Russia and China and terminate the base deal with the U.S. could be seen as being in the best long term interests of Kyrgyzstan, Pannier noted.

Manas transit center, formerly a military base, was opened at the Manas airport in late 2001 as a major logistics hub for transporting goods and anti-terror coalition forces to Afghanistan. The annual rent for the transit center amounts to $60 million.

However, earlier the International Monetary Fund has said the closure of the Manas transit center in 2014 will cause difficulties for Kyrgyz state budget.

Sureyya Yigit, the advisor of the Turkish Center for Middle Eastern Strategic Studies (ORSAM) on Eurasia believes the Kyrgyz government will be by $60 million poorer when the transit center closes.

"Financially the Kyrgyz budget which was nearly balanced in 2008 and 2009 began to experience a deficit in 2010, which was at a manageable -1.5 percent of GDP. 2010 and 2011 both, however, witnessed approximately a 5 percent deficit and 2013 is expected to be greater than 6.5 percent. Therefore, there is a financial incentive to recuperate any earnings loss as the Manas lease contributes approximately 3.3 percent to the national budget," he said.

Transit center to become a civil hub

Kyrgyzstan holds negotiations on creating a hub in the transit center with Turkey, Russia and other countries. Recently Kyrgyz Ambassador to Saudi Arabia Jusupbek Sharipov has said Saudi Arabia is ready to finance the construction of logistics center in the Manas airport.

Pannier believes the comments made by Chinese and Russian officials about participating in the rebirth of Manas Airport as a transit hub are groundless as neither country has any reason to use Manas as a transit hub for bilateral trade.

The expert also noted Turkey have expressed some interest in helping turn the transit center into a civilian transit hub.

"Possibly other countries in the Middle East such as Saudi Arabia, potentially Iran, could use Kyrgyzstan for trade with China, a sort of recreation of the ancient Silk Route but with planes and trains. Such countries might see advantage in investing in the civil hub," the expert noted.

Pannier considers the U.S. as a potential customer for the new civil hub. According to him, non-military supplies - food, medical materials and equipment and other things - could still find their way from the U.S. to Afghanistan via Kyrgyzstan.

However Pannier believes the future prospects of the civil hub are not good.

"I would be surprised if the civil hub ever brings in as much money as the transit center, previously U.S. military base, did," he said.

Yigit, in turn, believes geographically Manas airport has a strategic advantage in that its coverage not only includes greater Central Asia, but also China, Mongolia and Russia. A civil hub has the potential to appeal to all of these countries.

According to Yigit, Kyrgyzstan continues to enjoy the image of the most business friendly country among all Central Asian states, despite having a very small economy.

"That makes Manas an attractive proposition, plus the experience it has had since 9/11 working with American/international efforts flying supplies and personnel to and from Afghanistan," he said.

Yigit went on to say that Russia has historic economic and political ties with Kyrgyzstan, in charge of the Kant air base just outside of Bishkek. Russia also tries to attract Bishkek into entering deeper economic integration.

"India is looking to involve itself more in Central Asia, primarily in terms of importing energy but also contributing to a transport hub/network. Turkey has strong ethnic and historical ties, major investor in education and trading enterprises. Turkish Airlines already uses Manas as a stopover for its Istanbul-Ulaanbaatar flights. This could be another avenue to explore for the expansion minded national airline carrier. China is Bishkek's important trading partner, provider of most manufacturing and electronic goods," he said.

Alternative transit facilities for the US

Touching on the possibility of the U.S. to use another transit facility for moving military personnel and equipment from Afghanistan after 2014, Pannier said the country is already using several other facilities in other Central Asian countries.

"There is still a base in Dushanbe that NATO forces have been using," he said. "Tajikistan's government has not been clear on the future of foreign troops at that base. The U.S. uses an airfield in Navoi, Uzbekistan and German (and sometimes U.S.) troops use the base near Termez in southern Uzbekistan. Kazakhstan has offered the U.S. use of airfields in southern Kazakhstan. There have been reports about U.S. cargo planes landing for refueling in Ashgabat, Turkmenistan."

He also noted all these facilities have one thing in common - they have never received the attention and publicity that the Manas base in Kyrgyzstan has received, because there are no U.S. or foreign troops, or at most very few, on the ground in these places, so the U.S. and its NATO allies continue to use these points for refueling and loading and unloading cargo.

Yigit believes if relations with Tashkent improve, Uzbekistan is a potential candidate. Kazakhstan and Tajikistan as well as Turkmenistan are unlikely alternatives.

Azernews

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