ENGRUS

Uzbekistan, Kyrgyzstan Open New Chapter in Relations

Uzbek President Shavkat Mirziyoyev’s early September visit to Kyrgyzstan exceeded expectations, as it settled a long-standing border issue and raised hopes for broader regional economic cooperation.
 
Mirziyoyev’s visit to Bishkek resulted in an agreement to delineate 85 percent of the two nations’ shared 1,170-kilometer border. The border issue had long been an irritant in relations.
 
But Mirziyoyev dangled the prospect of something potentially even more momentous when he spoke about Uzbekistan’s potential involvement in Kyrgyz hydropower projects. The late Uzbek leader Islam Karimov had steadfastly opposed such plans on the grounds that they could disrupt Tashkent’s economically important agricultural sector, especially the cotton crop.
 
Mirziyoyev and his Kyrgyz counterpart Almazbek Atambayev outdid one another in professions of mutual admiration. “This day, which our peoples have been awaiting for 25 years, is a major achievement of President Shavkat Mirziyoyev. He calls me a friend, as do I him, and we will always be friends and brothers,” Atambayev said.
 
Mirziyoyev was similarly intent on underlining the historic nature of their meeting. “What was laid down by our ancestors — our duty to live in friendship, harmony and peace — is something we must pass on to the younger generation,” he said.
 
When it came down to business, the results were fairly modest. Kyrgyz Prime Minister Sapar Isakov said deals worth around $115 million had been tentatively agreed upon by companies from the two countries. “In the near future, the deals will be formalized and signed. This is a very heartening fact, and it is only the first step,” Isakov said.
 
Business executives traveling in the Uzbek delegation came from the construction, food, industrial and cosmetics sectors.
 
The president of Kyrgyzstan’s chamber of trade and commerce, Marat Sharshekeyev, said that bilateral trade turnover in the first half of 2017 reached around $170 million — double what it was in the same period a year earlier.
 
Mirziyoyev wants that figure to multiply. “I never tire of repeating that if we assist businesses instead of interfering, they will find their own way. And when we talk about increasing trade turnover to $500 million, is that a lot or a little? I think it is a little,” he said during his meeting with Isakov.
 
Mirziyoyev then floated the idea of building a car-assembly plant in Kyrgyzstan, or creating joint enterprises in the textile sector. Uzbekistan is already putting final touches on a similar arrangement on automaking with Kazakhstan, whose AllurGroup reached a deal to assemble a version of GM Uzbekistan’s Ravon Nexia R3 at its Kostanay plant. The Nexia R3 is an adaptation of the Chevrolet Aveo sedan.
 
For Uzbekistan, the appeal of launching joint ventures with Kazakhstan and Kyrgyzstan is that both nations are members of the Moscow-dominated Eurasian Economic Union — a fact that raises the prospect of advantageous access to the Russian market for Uzbek goods.
 
The Uzbek leader’s most eye-opening remarks in Bishkek concerned his specific overtures on one of Kyrgyzstan’s ambitious hydropower projects.
 
“We will build the [Kambarata-1 station] together. Because it is indispensable to us, we need it,” he said. “We should do this in a way that is considered and rational, so that it is advantageous to both sides.”
 
That is a sharp departure from Uzbekistan’s historic opposition to upstream dams.
 
Work on the 1,860-megawatt Kambarata-1 hydropower plant has stalled since Russia’s RAO UES in 2015 eased itself out of the project. Some estimates put the cost of completing the project at more than $2 billion.
 
Kyrgyz analyst Marat Kazakpayev, in comments to the Russian state-run Sputnik news website, cautioned against excessive elation over Mirziyoyev’s comments on Kambarata-1. Agreeing on mutually beneficial terms could prove tricky, he indicated.
 
“It must be carefully evaluated,” Kazakpayev said, referring to the Uzbek leader’s statement. “First we need to find out what terms they [Uzbekistan] are offering, then sign a deal and begin building. Only then can we say that everything is going great.”
 
Recent developments in the energy sector have hinted at how greater regional resource coordination could work.
 
In July, it was announced that Kyrgyzstan had reached a deal to supply Uzbekistan’s state power company with 1.25 billion kilowatt hours of electricity at the favorable rate of $0.02 per kilowatt hour. Between June 16 and July 4 alone, Kyrgyzstan supplied Uzbekistan with 192.5 million kilowatt hours.
 
And then in late August, Kyrgyzstan inaugurated its newly expanded pipeline carrying natural gas from Uzbekistan’s Bukhara region to Kazakhstan. The upgrade doubled the Kyrgyz section of the 111-kilometer route’s annual throughput capacity to 3.9 billion cubic meters of gas. Kyrgyzstan’s gas pipeline network is owned by Russia’s Gazprom.
 
It only remains to connect the dots to complete a virtuous circle. The most obviously desired outcome is that Kyrgyzstan will be able to eventually produce large amounts of relatively cheap hydro-generated electricity — for sale to Uzbekistan, among others — and use the revenue to buy more Uzbek gas.