Kyrgyzstan: Russia Calls in its Debts

Monday, 21 February, 2005

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Cholpon Orozobekova

Russia is having second thoughts about allowing Kyrgyzstan to reschedule its debts in what appears to be an attempt to exert political pressure on its Central Asian neighbour following its decision to allow the United States the use of an air base.

At stake is an agreement to restructure Kyrgyzstan's 133 million dollar debt to Moscow, which had been reached in July 2001 but is now languishing with the Russian State Duma awaiting ratification.

The deputy chairman of the Duma committee on international affairs, Sergei Shishkaryov, threatened in a statement in March not to recommend approval of the accord. Following the agreement with the US on use of the air base, he said Kyrgyzstan could no longer be described as one of the poorest countries of the CIS, the association of states of the former Soviet Union.

"Kyrgyzstan has presented its military bases for the housing of the American military contingent and is expecting significant financial injections. For this reason we have the right to ask for the repayment of debts incurred," Shishkaryov said.

Shishkaryov's statement triggered alarm in Bishkek and a Kyrgyz parliamentary delegation was sent to Moscow to convince the Russians they should delay repayment of the debt. The Duma committee on CIS affairs then visited Bishkek and was received by President Askar Akaev, a measure of the importance Kyrgyzstan attaches to resolving the issue.

There are conflicting reports on the nature of the deal between Washington and Bishkek on the use of the air base at Manas. When they ratified the agreement, Kyrgyz deputies said their country would make no significant profit.

But the director of the Institute of Countries of the CIS, Konstantin Zatulin, told journalists in Moscow that according to statements by American military personnel, the US was prepared to spend around half a billion dollars on the reconstruction of Manas airport and would pay 270-300 million US dollars per year to rent the property.

President Akaev apparently gave the Russian deputies a different story. "During our conversation with Askar Akaev we learned that the Americans had only come to Kyrgyzstan for a year. In accordance with the agreement, they will leave a year after the completion of the operation. That condition has to be met," said Sergei Budazhapov, a member of the Russian delegation to Kyrgyzstan.

Budazhapov noted that the decision to allow the US to use the air base had resulted in a certain cooling in relations with Russia. But he thought this was an entirely normal reaction.

President Akaev is concerned that the issue of the air base should not divide Kyrgyzstan and Russia and has accused unspecified individuals of sowing discord.

"Certain forces are attempting to present the current presence of US military bases in Kyrgyzstan as something that conflicts with Russian interests and has the aim of limiting (its) influence in the region or pushing Russia out altogether.

"I can say in all honesty that there are no grounds for such speculation. They can only have improper intentions - to drive a wedge between Central Asia and Russia on the one hand and between Russia and the USA on the other," he said in a report presented in Moscow recently.

The chairman of the Duma Committee for CIS Affairs, Boris Pastukhov, was optimistic that the rescheduling accord would soon be ratified, but stressed that the debt still had to be paid.

"Russia also has its fair share of debts. However, we stick to the principle that debts must be returned. As strategic partners, of course, we won't torment our brother country. We will be grateful if you repay the debt over a period of time as best you can, say, in the form of agricultural produce, and a portion of the debt can be repaid in shares or stocks," Pastukhov said.

Kyrgyz deputy Marat Sultanov believes the authorities in Bishkek caused the problems with Russia by exaggerating the potential benefits of signing an agreement with Washington.

"Of course, if we make a big noise about it in public, about us getting 200 million dollars, then why shouldn't Russia believe us? Their reaction is well grounded. In the agreement with the US, it's clearly written that the airbase is freed from all taxes and duties. So the state budget really doesn't receive anything. Some resources, of course, will go into the private sector, to the Manas airport, to the owners of petrol stations, hotels," he said.

There are some in the Kyrgyz parliament who feel that the hard line position taken by some Russian deputies on the debt repayment issue is entirely correct.

"Kyrgyzstan, as a partner of Russia's for many years, isn't fulfilling certain obligations and isn't repaying its debts. At the same time it's flirting with other countries against the interests of Russia. When an ally makes some incomprehensible moves, it's an entirely understandable reaction," said deputy Iskhak Masaliev.

"Because Kyrgyzstan is between two great powers such as Russia and China, it should have avoided hosting the US airbases. But now, what's done has been done. There's only one thing left to do: to get down on our knees and beg forgiveness from Russia, and to try and convince Russia that nothing like this will ever happen again."

Arkady Dubnov, a journalist with the Russian Vremya Novostei newspaper and author of many analytical works on Central Asia, points out that the last time he was in Moscow, Akaev had to wait several weeks for an audience with his Russian counterpoint Vladimir Putin.

"The leadership of Kyrgyzstan must stop playing the unfortunate beggar who promises to be a grateful, wonderful partner to whoever gives it alms."

Cholpon Orozobekova is an IWPR contributor