12 25 May 2017

Addressing Water Insecurity in Central Asia: A Steppe on the One Belt, One Road Initiative?

Mervyn Piesse Research Manager Global Food and Water Crises Research Programme

Key Points

 Central Asia is integral to Chinese efforts to increase its global connectivity. Natural resource constraints, including access to water,

could undermine its influence in the region.

 Given the legacy of failed foreign water infrastructure in the region, any Chinese efforts to address water insecurity are likely to be treated cautiously by Central Asians.  Short of constructing water infrastructure in Central Asia, which is a potential minefield for Beijing, China could act as a mediator in the

region’s water disputes. Such a step will be politically sensitive, making it

an unlikely prospect.

 The means to resolve water-based tensions in Central Asia will need to come from within the region. External efforts to promote water sharing are likely to be interpreted as unwanted foreign interference.

Summary

Central Asia is a vital component of the Chinese Belt and Road Initiative. The states of Central Asia generally share antagonistic relations with each other, partly because of the unequal water distribution in the region. Beijing could seek to reduce interstate tensions to better secure its investments, but it is unlikely to do so as this could weaken its relations with some of the countries in the region. Any solution to political tensions over water resources in Central Asia will need to come from within the region.

Analysis

The “One Belt, One Road” (OBOR) initiative, introduced by Chinese President Xi Jinping in 2013, is a grand strategy that, if seen through to completion, is likely to take decades to fully realise (there are suggestions that the OBOR initiative is still in the strategic planning stage, will not reach the implementation stage until 2022 and will run until 2049). The initiative focusses on funding and building infrastructure projects in fields as diverse as energy, transport, logistics, oil and gas and telecommunications throughout Eurasia, Africa and Oceania. It is often compared to the US Marshall Plan, which invested in West European reconstruction in the aftermath of the Second World War. The Marshall Plan was a manifestation of Washington’s new global power and closely integrated Western Europe with the US economy. Such comparisons are facile, as the OBOR initiative is considerably more complex and ambitious than the Marshall Plan.

As Europe was destroyed both physically and economically after the Second World War, it welcomed investment from the US. As Western Europe and the US share similar cultural and political values, the US did not face the barriers to market entry that Beijing is likely to face throughout the regions targeted by the OBOR initiative. The US did not seek to tie together disparate cultures and markets. The US was also keen to increase its influence in Western Europe and prevent the Soviet Union from expanding its foothold on the continent. Xi has suggested that over the next decade, US$1.6 trillion will be invested in infrastructure and development aid in Asia, Africa and the Middle East, for comparison the US spent US$130 billion in current dollars on the Marshall Plan. By encouraging infrastructure spending in foreign countries, through the provision of loans, China aims to create demand for its manufactured goods, particularly steel and cement, and its large labour force.

China, ever fearful of social unrest, has a lot riding on the success of the OBOR initiative. Closed steelworks contribute to rising unemployment which, in turn, has the potential to induce social discontent. Parts of the Chinese economy have been over productive since 2006, leading to a surplus of materials. Lower demand for Chinese goods in advanced economies means that China needs to identify and cultivate new markets for its products, potentially in underdeveloped parts of the world. By manufacturing demand for Chinese cement and steel it can generate jobs and avoid mass layoffs that threaten to destabilise the country. There is growing evidence, however, that Chinese infrastructure projects are generally not rational investments and contribute to the kind of instability that China wants to avoid.

Some countries involved in the OBOR initiative are concerned that by taking on large amounts of Chinese debt they could be lured into a “debt-trap”, a form of geo-economics that is designed to improve Beijing’s geopolitical standing through economic means. By extending large loans to developing countries, China is not just supporting infrastructure projects but also gaining access to strategic resources and bringing countries into its strategic orbit. Countries that are unable to pay back their debt are being forced to sell stakes in Chinese-financed projects or hand over their management to Chinese state-owned enterprises. It has even been suggested that some financially insecure countries, such as Tajikistan, are left with little option but to effectively sell territory in return for debt relief.

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Central Asia is integral to the land-based portion of the OBOR initiative and, if it is to be successful in increasing connectivity, China will need to expand regional railway capacity. The Central Asian rail component depends on three trunk lines: West Passage 1, West Passage 2 and West Passage 3. West Passage 1 will begin in Khorgas, a Chinese border city in Xinjiang province, before crossing Kazakhstan and connecting with the Russian Trans- Siberian Railway. West Passage 2 will also begin in Khorgas and transit Turkmenistan, Iran and Turkey via Kazakhstan. West Passage 3 will connect Kashgar, a Chinese city in Xinjiang, to Osh, a city in the Kyrgyz section of the restive Fergana Valley. From there it extends to Uzbekistan, Turkmenistan, Iran and Turkey. Without the co-operation of the countries in the region, China will find it difficult to construct the land route that connects western China to Europe. Water insecurity could militate against the closer regional integration that China requires for its connectivity efforts to be successful.

Poor regional water security, which is potentially destabilising to the point of undermining Chinese investment, has so far failed to elicit a Chinese response. Water insecurity has increased in Central Asia since the 1950s and the region is perhaps the best example of the damage human hubris can have on the natural environment. During the 1950s the Soviet Union embarked on a massive engineering scheme designed to increase the agricultural output of the region. All Central Asian countries are continuing to grapple with the aftereffects of the poorly implemented scheme.

Soviet engineers built water canals to divert water from the two main river systems in the region, the Amu Darya (known historically as the Oxus) and the Syr Darya. These rivers

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originate in the highlands of the Tien Shan, Pamir and Hindu Kush mountains and empty into the Aral Sea, which was once one of the four largest lakes in the world. The lake gradually dried as water was diverted from the rivers. By 2007, it had lost 90 per cent of its water and had split in to four separate lakes. In August 2014, for the first time in modern history, the eastern basin was completely dry. Each year, more than 150 million tonnes of salt and dust are carried from the dried seabed and dumped on agricultural land, damaging soil and human health.

Water resources have been a source of tension between the five Central Asian states since they gained independence in 1991. During the Soviet era, these tensions were kept in check by a water for energy scheme whereby the two upper riparians, Kyrgyzstan and Tajikistan, would provide Kazakhstan, Turkmenistan and Uzbekistan with water during the summer in return for coal, gas and electricity during the winter.

The Soviet irrigation system was designed to provide a predictable and stable water supply. It encouraged the mainly nomadic people to settle in villages and towns and produce cotton for Soviet mills. The irrigation canals were not well built and fell into a state of disrepair after the dissolution of the Soviet Union. In parts of the region, millions of hectares of salt marshes were created from leaky canals or the inefficient use of water.

In 1992, after gaining their independence, the Interstate Commission for Water Coordination was established to oversee regional water sharing. It was designed to fill Moscow’s role in managing the region’s water, however, due to mistrust and historical

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animosities, the system quickly broke down in the 1990s, leaving Kazakhstan, Turkmenistan and Uzbekistan water stressed and Tajikistan and Kyrgyzstan with energy shortages.

Tajikistan, the poorest country in Central Asia, holds ample reserves of water due to its small population and proximity to mountain glaciers. It has restarted construction on the Rogun hydropower dam on the Vakhsh River, a tributary of the Amu Darya. If it is completed, the dam is expected to make Tajikistan a net energy exporter and solve the perpetual electricity shortage. The dam has aggravated tensions with downstream countries, however, potentially weakening regional relations.

Uzbekistan, which relies on the Amu Darya to irrigate its cotton- and wheat-based agricultural sector, has long protested the construction of the dam. The late President, Islam Karimov, called it a ‘stupid project’ and suggested that ‘many experts declare that water resources could tomorrow become a problem around which relations deteriorate, and not only in our region. Everything can be so aggravated that this can spark not simply serious confrontation but even wars’. His government believed that Rogun’s reservoir would take ten years to fill, restrict water access and cost the Uzbek economy US$20 billion. Tashkent sought to sway Dushanbe by closing borders to impede the flow of goods and people, and cut off gas supplies in the cold of winter. These coercive policies have clearly failed to deter Tajikistan, however, and alternative methods are now being pursued. Karimov’s successor as president, Shavkat Mirziyoyev, appears to have adopted a more measured stance (which has grown out of the détente between the two countries in recent years) but, as the dam threatens the national interests of Uzbekistan, it remains a point of contention between the two countries.

There are suggestions that China might be interested in funding the construction of the dam, which is estimated to cost US$4 billion – roughly half of Tajikistan’s GDP. It has already invested in roads across Tajikistan and it is making cultural inroads in the country with the spread of Confucius Institutes which promote Chinese culture and language. As investing in the project could weaken relations with other Central Asian countries, that China has oil and gas deals with, however, it is unlikely to do so.

Political tensions over water resources could be further inflamed if supply and demand trends change. Climate change is likely to reduce the glacial mass of the glaciers in the highlands of Tajikistan. Between 1961 and 2012, the region is believed to have lost 30 per cent of its ice mass. The Fergana Valley, a fertile stretch of land roughly the size of Israel, is at risk of desertification if water availability decreases. At the same time, the regional population continues to grow. Since 2000, the population of 68 million has increased by 13 million. If the population continues to expand, demand for water will also increase.

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Population in 2000 Population in 2015 Population Growth

(millions) (millions) (per cent per annum)

Kazakhstan 14.88 17.54 1.5

Kyrgyzstan 4.9 5.96 2.1

Tajikistan 6.19 8.48 2.2

Turkmenistan 4.5 5.37 1.2

Uzbekistan 24.65 31.30 1.7

Total 55.12 68.65

Source: World Bank World Development Indicators, United Nations Data

The potential for anti-Chinese sentiment is rising across the region particularly as more Chinese workers come into the region to work on infrastructure projects and mining tenements. There have been protests in Kyrgyzstan and Kazakhstan over laws that are perceived to benefit Chinese companies. Tajikistan, which is yet to experience widespread anti-Chinese protests – perhaps due to the high level of autocratic control, is also at risk. It was the poorest republic in the Soviet Union and remains impoverished. Close to half of its GDP is derived from the remittances that its migrant workers send from abroad. As more Chinese farmers come in to tend agricultural land abandoned by Tajiks that left to find work outside the country, the potential for anti-Chinese sentiment rises.

China has shown a willingness to address its own bilateral water relations with Central Asian states, but appears unwilling to wade into the morass of regional interstate hydropolitics. Chinese-Kazakh hydrodiplomacy is the most advanced – the two countries share 24 transboundary rivers. These rivers are managed on a relatively co-operative basis, particularly when compared to the rivers shared by China and lower riparians in South and South-east Asia. Negotiation between China and Kazakhstan on water sharing issues began in 1999 and an agreement to co-operate on the use and protection of their shared rivers was signed in 2001. In 2010, they agreed to start proceedings on setting water allocations. Of course, there is no guarantee that either side will abide by these agreements or allocations, should they eventuate, but they serve to increase trust and goodwill.

Even with the relative co-operation between China and Kazakhstan, however, the potential for increased tensions remain. China plans to divert more water from the Ili and Irtysh rivers for use in Xinjiang. In the 1990s, China built a canal to transfer water from the Irtysh River to northern Xinjiang. It has also increased its use of water from the Ili River. If water diversions continue, it is claimed that Lake Balkhash, which receives 80 per cent of its water from the Ili River, could face a similar fate to that of the Aral Sea. If this occurs, salt from the dry plain will blow across the region. If this salt spread into the glaciers that China and Kazakhstan depend on, it could speed up their demise.

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Water factors into geostrategic competition in the region. China uses water co-operation with Kazakhstan as a way to counter Russian and US influence in the region. India, which remains wary of the OBOR initiative, could use a similar tactic to counter Chinese activity in Central Asia. It could utilise hydrodiplomacy to frustrate Chinese efforts across the region, much as it has in Afghanistan. For the time being, however, water does not appear to be a focus of the Indian regional development plan.

Any solution to Central Asian water disputes will need to come from within the region. External actors, while well placed to exert pressure on regional governments, are reluctant to do so for fear of jeopardising trade relations. There are signs that regional actors are willing to negotiate water treaties. Mr Mirziyoyev, who became the Uzbek president in December 2016, has displayed an interest in improving regional relations. In March 2017, he sought to mend relations with Kazakhstan, a country which has long advocated closer regional integration. He also appears willing to mend relations with Tajikistan after meeting Emomali Rahmon, the Tajik President, in May. If the Uzbek president remains open and amiable to regional integration, which would undoubtedly include collaboration on water governance issues, tensions over water might finally begin to be ameliorated.

Given the level of animosity between Central Asian countries over the sharing of water resources, China is likely to avoid investing in water projects. If it is seen to be interfering in the water resources to the detriment of other countries it could be drawn further into regional tensions. For the time being, Beijing is content to benefit from the access it has to regional oil and gas reserves. If Central Asian water were to become a more valuable commodity, for agricultural production for instance, China could begin to take a greater interest in Central Asian water politics. For the time being, however, it will continue to place greater value in the region’s oil and gas and will be reluctant to pursue any strategy that could undermine access to these resources.

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