N°18 - October 11 2007 Published every two weeks/International Edition

CONTENTS P. 1/4 GEORGIA c A small metter of settling c A small metter of settling scores between "friends scores between "friends P. 2 DUSHANBE SUMMITS Since the end of September, Georgia has been facing one of the most serious political crises c tries the country has known since its “” of the autumn of 2003. The former Defense Min- to breathe new life into ister, , who came back to Georgia after six months in voluntary exile in the the CIS and in Ukraine, announced that he had formed an opposition party – Movement P. 3 TURKMENISTAN For a United Georgia – and attacked President Mikhail Saakashvili head-on. c The balancing act of Berdymukhammedov In a televised declaration on September 25, Okruashvili accused the president of having ac- KAZAKHSTAN c The redrawing quired most of his wealth illegally, and of having tried to cover up extortion charges against his of oligarch circles uncle, Temur Alasania. However, the former Prime Minister’s main allegations against the pres- ident are political in nature. Okruashvili declared that Saakashvili had, on several occasions, or- dered the attack or the assassination of opponents. One of the most sensational of these allega- tions is that the president told him to “get rid of” , the owner of the Imedi READ ALSO… media group, whose television channel is considered to favor the opposition. The former minister also hinted that the Interior Minister, and the head of the Constitutional Se- INTELLIGENCE curity Department, Dato Akhalia, were directly implicated in the 2006 murder of the banker San- www.russia-intelligence.fr dro Girgvliani, for which several officials from the Interior Ministry were sentenced. Okruashvili KREMLIN also caused a sensation when, speaking of Prime Minister ’s death in 2005 - offi- c Hunting scenes in cially from carbon monoxide poisoning - he suggested that suspicions of murder were well-founded. GOVERNMENT c Vladimir Putin, The government’s response to these accusations – unprecedented in Georgian politics as they the improbable “Chancellor directly target the President for the first time – was not long in coming. Okruashvili was arrested of Russia” on September 27, two days after his interview, officially on charges of extortion and abuse of power. FOCUS Several supporters in his new political party were also arrested, as were close allies of his such as c Who will take ? Malkhaz Bukia, head of the party’s branch in Poti. On the day Okruashvili made his declaration, RAIL police arrested two other close associates: Dmitry Kitoshvili, spokesman for the President and c RZhD : Vladimir Yakunin Parliamentary Secretary, and Mikhail Kareli, the governor of Shida Kartli. unveils his industrial strategy ALERT According to several sources, Badri Patarkatsishvili, Georgia’s most prominent oligarch and a c Belarus : a good show by friend of Russian oligarch Boris Berezovsky, finances Okruashvili’s new political party. Okruashvili Telecom Austria is said to have met Berezovsky several items in . The former Prime Minister’s arrest imme- UKRAINE INTELLIGENCE diately sparked a serious political crisis. Demonstrations were held in front of the parliament and, www.ukraine-intelligence.fr notwithstanding the fact that not everyone approves of Okruashvili who, after all, was a member of the government just less than a year ago, several members of the opposition announced they ELECTIONS SPECIAL c The Elusive Winner were joining his new party. Meanwhile, Saakashvili, who was in the United States at the time, made no comment for several days regarding the accusations leveled against him. The situation has c Kiev: Leonid Chernovetsky on a Slippery Slope placed the government and members of the ruling National Movement in an awkward position, while rumors have been launched as to the truthfulness of Okruashvili’s statements. c and Rinat Akhmetov in the Orange Camp’s Sights A few explanatory points may help shed some light on this fresh battle between members of Georgia’s ruling elite, as well as on the brutal way in which the government reacted - at the cost of tarnishing its international image. The first point has to do with the 2008 presidential and leg- islative elections and the political rivalry between the President and his former protégé. Several polls taken in the first half of 2007 attest to the popularity of Okruashvili, who is a possible rival SUBSCRIPTION to Saakashvili. His new party may reap a lot of support, based on public discontent with the coun- Electronic Edition try’s stagnating economic situation. The Movement for a United Georgia, which holds its congress (PDF, published every two weeks, on November 15, has declared that it wants to reduce the power of the executive branch and the 23 issues per year) administrative function of the governors. Most important of all, it wants to resolve the “frozen con- SPECIAL OFFER flicts” in Abkhazia and . Okruashvili may insist on this last point in a bid to gain the Discount 15 % votes of the 250,000 Georgian refugees chased from the self-proclaimed republics. Indeed, Okru- € 600 ashvili uses symbols to play on national sentiment: the party has its headquarters near the Geor- €510 per year gian Orthodox Church Patriarchy, and it was presented to the public in d d d Continue page 4

A EURASIAN INTELLIGENCE PUBLICATION CENTRAL ASIA & CASPIAN INTELLIGENCE

DUSHANBE SUMMITS c Vladimir Putin tries to breathe new life into the CIS From October 4 to 6, Tajikistan was host to a triple summit: the cult to convince Uzbekistan, for example, to reverse its protection- CIS, the Collective Security Treaty Organization (CSTO) of the CIS ist measures, which block the global development of Central Asian and the Eurasian Economic Community (EEC). The CIS, which trade. Uzbekistan’s neighbors are also calling on it to do away with has never been an effective institution, is no longer a decision-mak- the visa system with Tajikistan, which was established in 1999, in ing body, but rather a platform for discussion in which bilateral and order to allow the free circulation of peoples - one of the guiding multilateral negotiations are held. The Ukrainian President was principles of the EEC. In the spring of 2007, Tashkent agreed to absent from the meeting for internal political reasons, while both lift visa requirements for Kyrgyz citizens going to Uzbekistan for Georgia and Azerbaijan have shown little interest in the post-So- less than two months. viet institution, the first in a rather pointed manner, the second in Besides these two developments, the CIS summit focused on a more discreet fashion. Most observers didn't expect too much several major themes: migration policy, the fight against terrorism from the summit of the CIS heads of state held October 5 in Dushanbe. and military cooperation. Several reform projects concerning the Some sceptics even went so far as to assert that Vladimir Putin's functioning of the CIS were also discussed, although it appears un- 55th birthday would be its key event. It's true that since its creation likely that these will become effective in view of the refusal of some in December 1991, the CIS has not exactly sparkled with effective- member states to be a part of a supranational system with Russia ness, a fact admitted recently by the Kremlin chief in repeating the as the dominant player. Georgia, therefore, did not sign the sum- formular first used by the former Ukrainian president Leonid mit’s final document. Migration policy was the only theme that ap- Kravchuk about "a civilised handling of a divorce" between the for- pears to have drawn a consensus. Indeed, all the participating mer Soviet republics.Looking at it more closely, however, the countries acknowledged that the extent of migration for employ- Dushanbe summit - especially its agenda points devoted to the CIS ment purposes required a liberalization policy on the part of Rus- Treaty organisation for collective security and the Eurasian eco- sia, which would legalize millions of illegal immigrants from Cen- nomic community -- illustrates a new political will by Russia and tral Asia, the Caucasus and Moldavia. Several agreements concerning could mark serious progress in economic and military integration. the legal and social protection of migrants are expected to be signed The nomination of Sergey Lebedev, director of Russian external in this framework on the initiative of Kazakhstan. intelligence services (SVR) since 2000, to the Executive secretariat This three-day meeting was also an opportunity for more in- of the CIS confirms the importance still attached to the post-So- formal bilateral meetings. Vladimir Putin and Gurbanguly Berdy- viet space by Vladimir Putin. mukhammedov held a discreet meeting in a bid to push forward The event that attracted the most attention from the media was the Caspian gas pipeline project and to discourage Turkmenistan undoubtedly the signing, by the secretaries of the CSTO and of the from taking part in the competing TransCaspian pipeline. Sev- Shanghai Cooperation Organization (SCO), Nikolay Bordyuzha eral officials from Gazprom were part of the Russian delegation and Bolat Nurgaliev, of a “Memorandum of Mutual Understand- - a reminder that Russia’s near-total monopoly on Central Asian ing”. The agreement sets the goals shared by the two institutions gas cannot be broken without triggering a sharp reaction from and guidelines for cooperation for the period 2008-2010. This in- Moscow. A meeting between the Tajik and Kyrgyz presidents was cludes, in particular, anti-drug trafficking operations involving the also on the agenda in a bid to endorse discussions held on Sep- border guards of the various member states and a joint recovery tember 19 during President Emomali Rakhmon’s visit to Bishkek. program for Afghanistan. On October 4, the eve of the summit, The two countries signed a cooperation agreement concerning CSTO foreign ministers signed a new protocol for military and tech- water and hope to form a tandem in order to better negotiate the nical aid to member States in case of aggression or the threat of sale of this resource to other nations in the region and to request aggression. The protocol confirms the importance of Russian lo- financial participation from them for the upkeep of hydroelec- gistical support and Russian arms sales to the nations of Central tric dams and plants. Asia, which are currently reforming their armies. Finally Presidents Rakhmon and Berdymukhammedov met for Meanwhile, within the framework of increased cooperation the first time, just before the summit. The Tajik president publicly between the two regional institutions, the future of Belarus and thanked his Turkmen counterpart for the agreement according to Armenia, members of the CSTO but not of the SCO, is not very which Ashgabat will sell Dushanbe 1.2 billion kWh each winter clear, although some observers have mentioned a “Minks-Bei- for the next five years to come. Tajikistan’s energy situation has jing” axis. As for Turkmenistan, its candidacy to the two institu- not improved. The country needs 3 billion kWh whereas Uzbek- tions is regularly discussed - in positive terms - but does not ap- istan sells it only 600 million and Kyrgyzstan has practically stopped pear to be on the agenda yet. The increased understanding its exports, as the level of its dams is too low. As each winter, elec- between the CSTO and the SCO is interpreted by some as an im- tric power restrictions went into effect on October 1 (electric power plicit announcement of the emergence of a NATO-type alterna- is available only early in the morning and in the evening) for the tive for Eurasia, under the leadership of Russia and China. It is entire country with the exception of the capital. During the sum- obvious, however, that the two powers wish to maintain control mit, Tashkent agreed to allow the transit of Turkmen electricity on as much on Central Asian energy resources as on the military - its territory. Turkmenistan also claimed it wanted to develop trade especially as the likelihood of Russia and China developing seri- with its Tajik neighbor by importing aluminium and by exporting ous military cooperation does not appear obvious. agricultural products. Finally by naming Sergei Lebedev to replace The second important event at the summit was the signing of the insignificant Vladimir Rushaylo as Executive secretary of the an agreement stipulating the creation of a customs union between CIS, Vladimir Putin was sending a very clear signal about his diplo- the countries of the Eurasian Economic Community. The birth of matic priorities and his threat perception. Officially the SVR does a unified economic territory is regarded as the first step towards not conduct intelligence activities against states of the CIS, but the an economic union. For the time being this remains somewhat the- direction of the exertnal counter-intelligence services is very ac- oretical. Although some countries like Kazakhstan have always tive in following the activities of Western services, according to 2 had an open policy, refusing to set high customs duties, it is diffi- credible Russia Intelligence sources. d Central Asia & Caspian Intelligence N°18 October 11 2007 CENTRAL ASIA & CASPIAN INTELLIGENCE

TURKMENISTAN c The balancing act of Berdymukhammedov As observers expected, the visit of Turkmen President Gur- oned in late 2002, had been anxiously awaiting any information. banguly Berdymukhammedov to the United States ended with But it is not known whether or not these men are on the list of no significant disclosures. Moreover, his address to students at those to be released. The list does include two other personali- Columbia University and later his speech at the UN General As- ties who have just been amnestied: Nurmurad Redzhepov, the sembly were in part overshadowed by the presence of Mahmoud son of Akmurad Redzhepov, the former head of the presidential Ahmadinejad, who received much more media attention. guard, imprisoned since the spring, and Geldy Kyarizov, the for- The Turkmen President, who presented himself as a man of mer leader of the State company Turkmenatlary, which breeds change, emphasized reforms in Turkmenistan’s education sys- the famous Akhal Tekke horses, who has been in prison since tem, and his determination to open up his country – all the while 2001. Several political personalities were already released in Au- stating that he was carrying on with the policies of his predeces- gust when the President pardoned eleven people, including Turk- sor. He refused to discuss human rights issues and explained that menistan’s Chief Mufti, Nasrullah ibn Ibadullah, who was al- the Rukhnama was still part of the school curriculum and of lowed to regain his post as advisor on spiritual affairs. Meanwhile, training programs for civil servants. The President’s speech ap- former Deputy Prime Minister Elly Kurbanmuradov, a former peared deliberately confusing - a sign of the difficulty within the close ally of Niazov, was freed in the spring, and several high- government of establishing a consensus concerning the reforms ranking civil servants had their prison sentenced commuted to it wants to put in place. house arrest. Should Boris Shikhmuradov be freed – a move the new government does not appear ready to handle - it would be Be that as it may, on September 29, Berdymukhammedov an- considered a real sign of political liberalization. nounced a wide-ranging amnesty for 9,000 people for the end of Ra- madan. All the amnestied prisoners are to be freed, at the latest On the energy front, some slight progress was made on the side- on October 9, just before the end of the fasting period. His prede- lines of the Turkmen President’s visit to the United States. Berdy- cessor, Saparmurad Niazov, established the amnesty tradition, mukhammedov met US Secretary of State Condoleezza Rice briefly freeing up to a record 16,000 prisoners in 2002. The aim of this on September 25. They discussed US-Turkmen energy cooperation yearly event is not merely to show off the president’s generosity and as well as issues dealing with democratization. The President also his respect for Islam, but also very much in order to free overcrowded met with representatives of large US firms, brought together by prisons - it is believed that one third of all citizens in Turkmenistan the think tank, Eurasia Group. During this meeting he acknowl- have had trouble with the law. The 2007 amnesty seems, however, edged there were difficulties in negotiations with Moscow over to have a specific purpose and is widely interpreted as a sign of a construction of the Caspian gas pipeline, the main stumbling block political thaw – regardless of the fact that several witnesses have being the price of the sale of gas. Berdymukhammedov announced confirmed that it is possible to “buy” the freedom of certain pris- that he wanted a hike in the price of gas sold to Gazprom as of oners through a payment to the State Commission in charge of cit- January 1, 2008. Despite a deal that establishes the sale price at izens complaints against the security services. The list of those $100 per 1,000 cubic meters until 2009, Ashgabat now wants to amnestied includes 158 foreigners and over 8,800 Turkmen citi- be paid $150 per 1,000 cubic meter. This significant price hike will zens. The names of all but twenty of the amnestied prisoners have be passed on to Ukraine, the main client of Turkmen gas, which been made public. All kinds rumors are circulating about whether would then have to pay $170 per 1,000 cubic meters, an unexpected or not the country’s main political prisoners are on the list. burden on the nation’s budget. Meanwhile, for the time being Turk- During his stay in New York, Berdymukhammedov acknowledged menistan cannot follow through on its threat to sell its gas to part- that former opposition member Boris Shikhmuradov and former ners other than Russia, since the Iranian pipeline does not have Foreign Minister Batyr Berdyev were alive. The families of the two a very large capacity and China will be paying only $90 per 1,000 men, who had been without news of them since they were impris- cubic meters when it starts buying Turkmen gas in 2009. d

KAZAKHSTAN c The redrawing of oligarch circles In the wake of the “Aliev affair” and the resignation of Timur tracks, even though they were members of the ruling elite. The Kulibaev from his post as Deputy Chairman of Samruk, a look group of oligarchs that had managed part of the country’s trans- into the internal conflicts between Kazakhstan’s oligarchs may portation, telecommunications and goods industries was dis- be in order. Many Kazakh oligarchs made their fortunes in the mantled in 2002 when its leader, Mukhtar Ablyazov, one of the first half of the 1990s, when they were in charge of administrat- founders of the opposition party Democratic Choice of Kaza- ing the main investment and privatization funds as the coun- khstan, was arrested. Bulat Utemuratov, Secretary of the Na- try’s industries where being privatized. As in Russia, this class tional Security Council who became the president’s property of oligarch, although closely connected to the ruling family, had manager, took over a part of this group. The building and agri- some rather vague inclinations for independence, and some tried culture sectors, which were to a great extend in the hands of Za- to limit the supremacy of the Nazarbaev clan. However, in the mambek Nurkadilov, was also dismantled when its leader was early 2000s, the “family”, following the Putin example, tried to murdered in November 2005. Nurkadilov, a former mayor of the reassert the “verticality of power” in managing the nation’s re- city of Almaty and governor of the Alma-Ata region, had been an sources. ally of Nazarbaev’s but broke off with him in 2004 to join the op- Thus, the two oligarchs who tried to enter politic as oppo- position movement, For a Just Kazakhstan. nents to President Nazarbaev were quickly stopped in their The oligarch groups that managed d d d Continue page 4 3 Central Asia & Caspian Intelligence N°18 October 11 2007 CENTRAL ASIA & CASPIAN INTELLIGENCE

d d d From page 1 Gori, Stalin’s home town. The former defense of acceding to NATO in 2008, since the organization takes into minister, who is responsible for the 2004 assault on South Osse- consideration not only defense-sector reforms, but also the tia, which brought the conflict to a stalemate, is regarded as a overall running of the country and its democratic system. Al- “hawk” who has always promoted the use of force to bring the two ready criticized for its unwillingness to favor a political settle- secessionist republics back into the national fold. ment in Abkhazia and South Ossetia, Georgia’s new political crisis, and the clumsy way in which it has been handled by the It is possible, however, that the battle between these former government, has triggered further international disapproval. allies involves, in fact, a bid for influence within ruling circles. Moreover, some of Georgia’s western partners were left uncon- Okruashvili appears determined to eject Liberty Institute, the dis- vinced following Saakashvili’s virulent verbal attack against creet but influential NGO that has managed to obtain many posi- Russia at the UN General Assembly on September 26. The Pres- tions within the government – a feat it accomplished all the more ident accused Moscow of carrying out “terror missions” in the easily since its main opponents were gone: Zhvania died, Okru- country and of leading the Abkhazians into warfare, in refer- ashvili was removed from power, and the allies of the two men ence to the two Russian officers killed on September 20 in the were politically marginalized. Several members of the NGO cur- Kodori Gorge. rently hold strategic positions within the government. They in- clude parliamentarian Giga Bokeria, one of the leaders of the The lack of transparency and the prevalence of personal in- National Movement and Vice President of the Parliamentary As- fluence in Georgian politics is reflected in the way those within sembly of the Council of Europe, Interior Minister Vano Mer- the spheres of power capitalize on issues such as “frozen con- abishvili, and the Minister of National Education, Kakha Lomaia. flicts” and strained relations with Russia as a means of com- peting with one another – a game that undermines Georgia’s Revelations made by Okruashvili against this organization went image as “the most western nation” of the former USSR. d down well with public opinion, which is to a great extent critical of Bokeria and Merabishvili’s growing influence on the political scene. It is also possible that this same battle for influence within the top echelons of power contributed to Okruashvili’s fall in No- Update. As we go to press, Irakli Okruashvili has been freed vember 2006, aided by pressure from the Bush administration from prison after retracting his accusation (they were which looks favorably upon the Liberty Institute and was con- “defamatory” according to him) and paying $6 million bail. cerned over the then Defense Minister’s warmongering attitude. According to his body guards, he left the country with his family immediately afterwards, although his deny this. The “Okruashvili case” could have many repercussions for Meanwhile Badri Patarkatsishvili has decided to return to , Georgia. It could, in particular, seriously jeopardize its chances saying he does not fear being arrested.

d d d From page 3 to maintain their influence were those who tion movement, Democratic Choice of Kazakhstan, has led oli- made a conspicuous show of rejecting politics. This was espe- garchs to understand that the struggle for power should remain cially the case for the “Eurasian group”, led by Alexandre Mashke- very limited, and Subkhanberdin has publicly stated that he was vich, an oligarch of Russian origin. Mashkevich controls a large abandoning all political ambitions. part of Kazakhstan’s metallurgical industry, the most important economic sector in the country after hydrocarbons. In order to For several years Kulibaev had been conducting a low-key participate in the economic arena, the “Eurasian group”, dom- and ambiguous political strategy. He claims that he does not inated by non-Kazakhs, needs the direct backing of Nazarbaev, want to enter politics, yet gathers around him those oligarchs who himself uses this particular lobby as a counterweight to in- who are the most disappointed by Nazarbaev’s policies. Many ternal struggles within the “Family” and to internal Kazakh clan influential groups are angry with the way the President has been rivalry. Another influential group of oligarchs is led by Nurlan re-centralizing the economy since the start of the 2000s. Oli- Subkhanberdin, head of Kazkommertsbank, Kazakhstan’s main garchs in the electric power sector, who reject management of private bank. This grouping includes the young industrial and this strategic industry by the central State, reacted badly to financial circles, disappointed by the lack of reforms, which con- Kulibaev’s replacement at Samruk by Kanat Bozumbaev, head trols the banking, transportation and telecommunications sec- of the State electricity company (KEGOC). It appears that oli- tors. It is frequently attacked by the authorities, which suspects garchs in favor of a private economic system that would allow it of being sympathetic to the opposition and accuses it of hav- them greater room for maneuver is currently regrouping around ing financed the election campaign of Ak Zhol in 2004. Its leader, three figures: Utemuratov, Ablyazov, who was freed in 2003 af- often depicted as the “Kazakh Khodorkovsky”, has close ties ter having appealed to the president for a pardon, and Kairat to Timur Kulibaev. However, the repression against the opposi- Kelimbetov, the former Economy Minister. d

c Central Asia & Caspian Intelligence j Group Publisher and Managing Editor : François Roche j 115, rue Saint-Dominique - 75007 - PARIS - France j Editorial: [email protected] / Tel. 33 1 53 59 35 72 j Commision paritaire: coming soon j Subsription: [email protected] / Tel.& Fax:33146455375j Copyright Eurasian Intelligence 2006 - Copy and dissemination in any form prohibited (including Intranet).

c Ukraine Intelligence is published by Eurasian Intelligence SAS Capital euros 37,000. j CEO : François Roche j RCS Paris B 479 124 943 j Headquarter : 115 rue Saint-Dominique - 75007 PARIS Eurasian Intelligence Central Asia & Caspian Intelligence N°18 October 11 2007