The coming oil grab in Central Asia

July 15, 1996|By Jonathan Power

LONDON -- The Saudi Arabian bomb has reminded the world of the politics of oil. But. looking ahead, the intrigue of the Middle East is as nothing compared with that to come in the Caucasus and Central Asia, where geo-strategic rivalries, ethnic feuding and elusive independence combine in a volatile mix.

Straddling Europe, the Near East and Asia, the Caspian region is one of the largest underdeveloped sources of oil in the world. As the Persian Gulf oil is exploited to the point where its capacity and world demand intersect, this Central Asian oil will become a crucial alternative supply.

''Great Game''

The 19th century's ''Great Game'' was the rivalry between Russia and Britain, in part fueled even then by the competition for Caspian oil. The Caucasus and Central Asia were not only a point of access to the riches of India but a prize worth fighting for in itself.

Today's Great Game is being replayed with the oil-rich, but underdeveloped, countries of the former Soviet Union using energy as leverage to establish their independence.

Their difficulty is that they are landlocked; even if they get the oil out of the ground they need their neighbors on either side to exploit it.

This leads ''to a complex series of maneuvers and kaleidoscopic alliances and counter-alliances, designed to gain access to, and influence over, some of the most valuable resources in the world,'' according to Rosemarie Forsythe, who used to be director of Russian affairs in the Clinton administration's National Security Council, in a paper just published by the International Institute for Strategic Studies.

Russian muscle

Russia has used its muscle, again and again, to assert control over the oil policies in the region -- coups in Azerbaijan, stifling Georgia's moves toward autonomy, economic and political pressure on Kazakhstan.

As Steve LeVine of the Washington Post observed, ''By blocking and delaying new projects, the Russians have managed to win entry into practically every major energy deal -- with little or no cash investment on their own part.''

Still, in the new Great Game, Russia seems not yet to have a ''grand plan.'' Two schools of thought contend vigorously in Moscow.

Foreign Minister Yevgeny Primakov sees oil as a zero-sum game rather than as a possible cooperative effort through which everyone can benefit. His allies have won many of the early rounds. A second school, centered on Prime Minister Viktor Chernomyrdin, is more open to Western oil-company $ 1/8 participation.

The big political question is not oil today, but oil tomorrow. New pipelines must be built to replace the inadequate existing ones. Who will control them, and over whose territory will they run?

Chernomyrdin's interest

For the time being at least, the Chernomyrdin school appears to have the upper hand, partly because Russia itself increasingly relies on Western partners for oil exploitation and partly because the war in Chechnya has demonstrated that military muscle can be counter-productive. (There is also the allegation that Mr. Chernomyrdin has his own financial stake in the oil moving out the fastest way, which means the way the West wants.)

Clearly, if the Communists had won the presidential election, the pendulum would have swung the other way. Still the West may need to deploy further inducements, such as financial guarantees for multiple pipeline routes and more assistance for the region's infrastructure, legal framework and technical expertise.

It should also make a more serious effort to fold Russia into the institutions of the West, in particular G-7, the Western heads of government club, and the Organization for Economic Cooperation and Development. The next Russian presidential election is due in just four years, and four years in the Great Game is only the flick of an eye.

Jonathan Power writes a column on the Third World.

Pub Date: 7/15/96

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