Russia`s Motives in Relations with Central Asia and the Caspian Region - Essay Example

Russia is Guided by both Economic Needs and Security Concerns in its Relations with Central Asia and the Caspian Region Number Course Name and Number Name of Professor Date of Submission Number of Words: 3,024 Introduction Situated in between the Eastern part of Europe and the entire northern part of Asia, Russia is the biggest country in the world. As of 2010, Russia is considered the 9th most populated country with 142 million (DaVanzo and Grammich, 2001, p. 4). Considering that Russia is the largest in the world, the country shares borders with other countries including: Azerbaijan, Belarus, China, Estonia, Finland, Georgia, Kazakhstan, Latvia, Lithuania, Mongolia, North Korea, Norway, Poland, and Ukraine. (See Appendix I – Location of Russia in World Map on page ) As of March 2008, Russia has the most number of stockpile of nuclear weapons with 14,000 as compared to the United States with 5,400 (FAS, 2008). With regards to the world’s economic status, Russia is considered the 8th biggest in the world with purchasing power parity of $2.116 trillion worth of gross domestic product (GDP) (Central Intelligence Agency, 2010 a). Considering the economic and military power of Russia, this study will first discuss the history behind the Caspian Flotilla. Eventually, whether or not Russia is guided primarily by economic needs or security concerns in its relations with central Asia and the Caspian region will be tackled in details. As part of going through the main discussion, some real-life current events that are taking place between Russia, the Caspian region, and the central Asia will be used as concrete evidences in answering the research topic. Maintaining good economic and military power are both important in terms of protecting the socio-economic welfare of Russia against other countries. Prior to conclusion, the relevance between economic power and military power will be thoroughly discussed in relation to the Russia’s interests in maintaining good relationship with Central Asia and the Caspian Region. History behind the Caspian Region and the Central Asia and Its Relationship with Russia As a small coastal defence force, the Caspian Flotilla is composed of waterways patrol that is based in Astrakhan. For some time, several countries including Russia, Azerbaijan, Kazakhstan, and the Turkmenistan are fighting over the Caspian Flotilla (Global Security, 2010). During the end of the first quarter of 1992, the Caspian Flotilla was divided between Russia and other republics. Since the Azerbaijan troops were removed from the Caspian Flotilla, Russia was required to put up a military infrastructure in Astrakhtan as a new military base for the Caspian Flotilla (ibid). Located on the northern part of Iran and surrounded by the Azerbaijan, Kazakhstan, and the Turkmenistan that shares the same border with the south-west part of the Russian territory, the Caspian Sea was reported to have roughly 4.5 billion tons of unrefined oil on the Caspian Sea shelf (Ria Novosti, 2010). Similar to the Caspian region, the Central Asia is also known for its high volume of oil reserves particularly in Kazakhstan (Proactive Investors, 2010). Central Asia which is located in the middle part of Asia is composed of five republics that had once belonged to the former Soviet Union. The five major republics include: the Kazakhstan, Kyrgyzstan, Takikistan, Turkemnistan, and the Uzbekistan aside from other areas including Afghanistan, Mongolia, the northern and western part of Pakistan, the north-eastern part of Iran, Kashmir, the southern Siberia in Russia, and some parts of the Western China. (See Appendix III – World Map of Central Asia on page ) Because of Central Asia’s close proximity to China, China is heavily dependent on Central Asia for its oil and gas supply (Chan, 2001). Because of China’s high consumption of oil and gas supply, the Central Asia-China gas pipeline also known as the Kazakhstan-China gas pipeline was constructed and inaugurated on the 14th of December 2009 (Gurt, 2009). In order to discover more oil and gas resources in Central Asia, Gazprom1 and Rosneft2 are working together in the onshore exploration projects in Central Asia (European Dialogue, 2010). Although the Caspian region and the Central Asia are both rich in oil and gas resources, these two countries failed to have democracy even after gaining independence from its conquerors (Atkin, 1997, pp. 277 – 311). Due to lack of democratic power in politics, the fact that the Caspian region and the Central Asia are being managed by only one person makes its political power less competitive and unstable (Ochs, 1997, pp. 312 – 359). In general, the Caspian region and the Central Asia do not have sufficient revenues and technical knowledge needed in making these oil and gas products available to the world market. In order for the Caspian region and Central Asia to take economic advantages out of selling these natural resources, these two countries are left with no other choice but to search for a new alliance as outside business partners (Noreng, 1998). For these reasons, both the Caspian region and the Central Asia are at risk of becoming politically influenced and controlled by other powerful countries like Russia in exchange for their oil and gas resources. Real-life Current Events that is happening between Russia the Caspian Region, and Central Asia As of November 2010, the world market price of crude oil ranges between $74 to $88.38 per barrel (U.S. Energy Information Administration, 2010). With the continuously increasing prices of oil per barrel, not only does the cost of transportation increases but also the prices of major commodities like rice, wheat, sugar and other food including other non-food products (Southern States News, 2008). (See Appendix II – Comparison of World Market Prices of Crude Oil on page ) To enable Russia maintain its economic prosperity and political influences strong, the Russian government is interested in controlling the Caspian region and the Central Asia’s oil reserves. By doing so, Russia will become one of the most powerful country by the 21st century in terms of having strong independence, powerful and stable politics, and economic gains. Importance of Oil in Russian Economy Despite the continuously increasing market prices for crude oil in the world market, Russia is one of the least affected countries around the world. With regards to the total oil produced in barrels per day (bbl/day), Russia is the number one top producer of oil with 9,932,000 bbl/day as compared to Saudi Arabia as the second top producer of oil with 9.764,000 bbl/day based on 2009 estimates (Central Intelligence Agency, 2010 b). Considering that Russia is the second top most exporter of oil products with 4,930,000 bbl/day based on 2009 estimates (Central Intelligence Agency, 2010 c), it is crucial on the part of Russia to maintain a high level of oil reserves in order to maintain its economic position as the second top exporter of oil products in the world market. The Central Intelligence Agency (2010d) reported that Russia is the top 6th consumer of oil. With daily consumption of 2,850,000 bbl/day (Central Intelligence Agency, 2010 d), it is clear that Russia’s economy is totally dependent on the use of oil as its main source of energy. Since 2001 up to the present time, the Russian government is continuously searching for options on how they can maintain a high level of oil reserves (Berman, 2001). Oil Reserves Found in Caspian Sea Located on the northern part of Iran and surrounded by the Azerbaijan, Kazakhstan, and the Turkmenistan that shares the same border with the south-west part of the Russian territory, the Caspian Sea is a point of political argument and fight between the Azerbaijan, Britain, and Russia because of its 20 to 40 billion barrels of proven oil reserves (Global Security, 2010). Recently, it was reported that the oil reserves found on the Caspian Sea shelf is roughly 4.5 billion tons of unrefined oil (Ria Novosti, 2010). To prevent Russia from facing the negative economic consequences of not having sufficient oil reserves, the Russian government is exerting a lot of political effort to maintain a good relationship with the Caspian region. To immediately solve political, economic, and commercial concerns regarding oil and gas investments in Caspian, the Russia and Caspian Service (RCS) was formed to maintain a sound business relationship with regards to oil-related business transactions (PFC Energy, 2010). Considering the huge amount of oil that is located on the Caspian Sea shelf, allowing Russian-based oil companies to work on the Caspian Sea shelf will create a lot of work and business opportunities for the country despite the tight market competition within the domestic and international markets. (See Appendix III – Photo of Oil Drilling Facilities in Caspian Sea on page ) Political Relationship between Russia and Central Asia Since a lot of countries in Central Asia have weak political power in the world market, Russia is also enjoying a lot of economic and political advantages in Central Asia. There are quite a lot of Russian minorities who migrated in Kazakhstan. Considering that Russia shares the same borders with Kazakhstan, the Russian government has the advantage to influence the government of Kazakhstan (Larrabee and Lesser, 2003, p. 102). As a result of the current territorial disputes between Kazakhstan and Uzbekistan among other regions that share the same borders with Russia, the Russian government was given the opportunity to act as a negotiator in Central Asia (Larrabee and Lesser, 2003, p. 102). Since the Russian government acts as negotiator in case other regions encounter political and economic conflicts, Russia as a country is able to strengthen its political influence over other countries. Significance of Oil Pipelines in Central Asia Similar to the case of the Caspian region, one of the main reasons why Russia is maintaining a good relationship with the Central Asia is because of the oil business. Since most of the Russian oil pipelines are controlled by Moscow (Larrabee and Lesser, 2003, p. 102), the Russian government has to maintain its political partnership with Central Asia to keep the flow of oil business transaction between Russia and other nearby countries in Asia normal. According to Cohen (1996), there are two main pipeline routes in Central Asia. The first pipeline transport oil from Azerbaijani Caspian Sea shelf to the Black Sea coasts whereas the second pipeline transport oil from the huge Tengiz oil field going to Europe and the Mediterranean. Aside from these two main pipelines, the Central Asia-China gas pipeline also known as the Kazakhstan-China gas pipeline was constructed to enable Kazakhstan directly transport its gas supply to China (Gurt, 2009). Because of pure economic and political desire to control over the oil reserves in Eurasia, Russia and the British Empire are among the few countries that are continuously fighting over the Central Asia (Cohen, 1996). Discussion Among the political risks involved with making the oil and gas coming from the Caspian Region and Central Asia straight to the global markets includes the pipeline which is commonly used for transporting large volume of oil and gas, the political power involved in the decision-making process concerning who will rule the decisions made on the pipelines, and the possible economic and political instability which could result from unresolved issues between two or more countries (Noreng, 1998). Since the Caspian region and the Central Asia failed to have its own oil and gas pipelines which can be used in transporting these energy raw materials (Skagen, n.d., p. 1), other countries including Russia is interested in influencing the Caspian region and the Central Asia because of the political and economic power associated with having direct access to large volume of oil and gas resources. For economic and political reasons, many countries are fighting over high levels of oil reserves. Given that a lot of countries’ economy is highly dependent over the use of oil, four powerful countries such as in the case of Russia, the United States, Iran, and Turkey are using political power to gain control over the newly discovered energy or oil resources around the world. Among these four countries that are interested in gaining control over the Caspian region and the Central Asia, only Russia and Iran are politically strong in terms of being able to gain control over the Caspian region and Central Asia because of its proximity, the available transit routes, and adjacent markets (Noreng, 1998). Although the United States is also interested in gaining control over the Caspian region and Central Asia, the problem that U.S. government is facing is because of the distance of the United States from the Caspian region and Central Asia. To make it easier for the U.S. government to resolve the distance problem, the United States need to tie-up with Turkey (Noreng, 1998). However, collaboration between the United States and Turkey may not be insufficient in terms of allowing both countries gain control over the Caspian region and Central Asia. Not unless the United States would trigger war with the Central Asia, the U.S. government together with the Turkish government will still have problems coming up with sufficient amount of money required for them to invest on establishing new pipeline system in order to gain control over the enormous amount of oil reserves considering the present economic situation of the United States. Since the 19th century, Russia is fighting and maintaining its relationship with the Caspian Sea region because of political and economic reasons. As part of Russia’s investment on oil projects in the Caspian Sea, the Russian government has to establish new northern energy pipeline from Baku going to Ceyhan – the Russian port of Novorossiisk found on the Black Sea as the main transit route for the South Caspian oil (Larrabee and Lesser, 2003, p. 108). Basically, the development of the Baku-Ceyhan pipeline was the end result of the pipeline agreement after the Chechen war that took place between 1994 to 1996 (Global Security.org, 2010 b). In order to make the oil pipeline project work, Russia had to make use of political influence over the Central Asia. According to Cohen (1996), having control over the oil resources and export routes from the Eurasian hinterland is already one factor that could trigger a post-Cold War in politics. In line with this, the fight over energy resources is not limited between Russia and the British Empire. As part of the economic preparation for the 21st century, the Eastern and Western part of the world has already been fighting over who will gain control in the remaining oil reserves. In line with this, regional conflicts and wars in different parts of the world including the civil war in Chechnya between 1994 to 1996 which happened between the Armenia and Azerbaijan was aggravated by the Russian military forces in order to determine who will have the main control over the future oil pipeline routes (Cohen, 1996). After a long period of negotiation process, countries involved including the Azerbaijan, Georgia, Turkey, Turkmenistan, and the United States agreed to develop a commercial gas pipeline that connects from the Turkmenistan to Europe and Turkey (Global Security.org, 2010 b). Without the need to cross the borders of Russia and Iran, the route of this particular pipeline would travel to Georgia and Azerbaijan in order to transport the supply of Caspian Sea’s oil to Europe and Turkey (ibid). For most people, Russia is known to establish its political relationship with the Caspian region because of oil business. Even though Russia is targeting the Caspian region for its oil reserves, there were some speculations that the Russian government is also preparing its military forces for security reasons. In line with this, the Russian government ordered for the construction of another Gepard class ship which will be delivered to the Caspian Flotilla sometime in 2011 whereas a couple of Buyan class corvettes3 armed with surface-to-air missiles are also under construction (Kucera, 2010). Conclusion As one of the most powerful countries in the world, Russia is focused on being able to take advantage of the huge amount of oil and gas reserves that can be found in both the Caspian region and the Central Asia. Upon analyzing the strong desire of Russia in terms of controlling the Caspian region and the Central Asia, I conclude that the Russian government is interested in having a strong political influence over these two countries not only for economic purposes but also for security purposes. Because of globalization, each country is being challenged on being able to produce good quality goods and services at the lowest price possible. Given that the revenue of Russia is highly dependent on the production and exportation of oil and gas supply, it is a challenge for the Russian government to continuously support the large-scale oil and gas companies in Russia by developing international alliances with other countries that has rich natural resources related to oil and gas. As part of maintaining Russia’s revenue, we need to understand that oil and gas are the basic sources of energy. Therefore, the local industries in Russia are highly dependent on oil and gas for their daily production of goods. Specifically the theory behind the law of supply and demand explains the strong desire of Russia to gain political and economic power over the Caspian region and Central Asia. In the absence of abundant and cheap sources of oil and gas, the market prices of finish products would be very high as compared to other countries that are able to take advantage of cheaper oil and gas products. In case the energy resources of Russia are no longer able to accommodate or meet the local demand for oil products, the entire economy of Russia would be negatively affected. Since there are a lot of other powerful countries that are also interested in gaining control over the oil reserves in the Caspian region and the Central Asia, Russia has to make use of its military power in order to secure its own political and economic interests. Military intervention is often used by powerful countries in order to gain either economic or political power over other territories. Since history repeats itself, we should not take the case of the Chechen war lightly. To secure Russia’s economic and political influence over the Caspian region, the Russian government is preparing and maintaining its military power in the Caspian region. Although the Russian government has currently no intention to create war, Russia is preparing its military forces in order prevent other equally powerful countries from invading the Caspian region for its oil reserves. *** End *** Appendix I – Location of Russia in World Map Source: WorldAtlas.com, 2010 Appendix II – Comparison of World Market Prices of Crude Oil Source: U.S. Energy Information Administration, 2010 Appendix III – World Map of Central Asia Source: Afghanistan and Central Asia Research Information (2010) Appendix III – Photo of Oil Drilling Facilities in Caspian Sea Source: Ria Novosti, 2010 References Afghanistan and Central Asia Research Information, 2010. Maps of Afghanistan and Central Asia. [online] Available at: [Accessed 14 November 2010]. Atkin, M., 1997. Thwarted democratization in Tajikistan. 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