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India and Kazakhstan: Impetus Needed in Relationship

Nursultan Nazarbayev greets Vajpayee in Almaty (2002)

Nursultan Nazarbayev greets Vajpayee in Almaty (2002)

On January 26, New Delhi will host Kazakh President Nursultan Nazarbayev at the Republic Day celebrations. India and Kazakhstan first established diplomatic relations following the collapse of the Soviet Union in 1991. Nazarbayev made his first official visit to India in 1992, and in 2002, following his second visit to New Delhi, then Prime Minister Atal Behari Vajpayee attended the Conference on Interaction and Confidence-Building Measures in Asia (CICA) summit in Almaty. At that time, Nazarbayev’s efforts in defusing India-Pakistan tension (emanating from the 2001 Parliament attack) were roundly praised. After the defeat of the NDA in the 2004 general elections, contacts between India and Kazakhstan, at the head of state level, have tapered off, until now.

India’s strategy towards Central Asian countries has been no different than its strategy towards African nations, and can be only summarized as “playing catch-up with the Chinese”. In this new “Great Game” of the century, India is consistently assuming the role of “Johnny-come-lately” to China in Central Asia. Indeed, China already has a fairly robust multi-dimensional relationship with Kazakhstan, as it does with other CIS states, on account of Shanghai Cooperation Organisation (SCO) membership. Kazakhstan is the largest country in Central Asia and shares borders with Russia, China, Uzbekistan, Turkmenistan, and Kyrgyzstan. President Nazarbayev is a Soviet-era leader who maintains fairly rigid control of the state, despite it being a democracy, by letter of law. Weary of China and Russia’s undue influence in the SCO, Kazakhstan has pitched for a full Indian membership in the council. India’s trade with this bludgeoning economy stands at a paltry $128 million (2007), contrasted against China’s $6 billion (2005) economic engagement with this Central Asian republic. This idle wasting of time is a shame, considering Kazakhstan’s phenomenal economic growth since the 2000s, which includes a staggering average GDP (absolute) growth of 9.5% from 2004-2007.

Kazakhstan’s strategic location along the Caspian Sea is hard to overemphasize. The Caspian Sea has the world’s third largest oil reserves, by some estimates, containing 200 billion barrels of oil, and 236 trillion cubic feet of proven natural gas reserves. Cognizant of the desperate energy situation in India, Oil and Natural Gas Limited (ONGC) is seeking a 40% share in Kazakhstan’s Satpayev oil exploration sector (with Russia’s blessing) in the Caspian, after getting outbid by China National Petroleum Corp (CNPC) for the acquisition of the oil company PetroKazakhstan.

However, Nazarbayev’s chief mission in New Delhi will be to ink a deal to export uranium, in the wake of the end of “nuclear apartheid” against India. India’s own uranium reserves stand at about 115,000 tons, most of which is low grade. Kazakhstan is currently the second largest producer of uranium, producing about 12,000 tons (2008); the country is likely to overtake Australia as the single largest producer of uranium by 2011. For India, inking the nuclear deal is a consummation devoutly to be wished. While nuclear energy constitutes only 3% of our total energy production, this figure will likely increase to 25% by 2050, as India seeks to reduce its reliance on “dirty” coal. India has already inked similar deals with Canada and France.

India should also continue to boost cooperation with Kazakhstan on the regional security front. The Kazakhs have expressed a desire to establish a naval fleet to guard its interests in the Caspian. They have looked to India for assistance and we have been happy to oblige, much to the chagrin of Russia. As I will point out in a later article, India’s engagement with Central Asia is going to ruffle feathers in Moscow and put us at odds with Russia; as a country with growing economic and political clout, India must at once expect this to happen, and at the same time not be hindered in our quest to establish new alliances despite the grievances/protests of our old allies.

Yet another important dimension of engagement on security should be partnering on intelligence gathering and counter-terrorism issues. Uyghur warriors, many of whom come from Kazakhstan and Kyrgyzstan, have been fighting Chinese rule in Xianjing province. Although present on a smaller scale, there is a growing component of Uyghur and Uzbek fighters in Osama bin Laden’s International Islamic Front (IIF) terror umbrella; that many of these fighters have seen action against Pakistani forces in South Waziristan should be a matter of interest to India.

India’s growing population and economy need sustainable sources of energy — the problem of inadequate power supply is already acute, and will likely get worse if remedial measures aren’t taken and alternative sources aren’t identified posthaste. In doing so however, both India and Kazakhstan need to not neglect other equally important areas of mutual interest. In this regard, our very one-sided, military dominated relationship with Russia should serve a reminder on how not to go about forging new partnerships.

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US – UAE Nuclear Deal

Very quietly, the United States and the United Arab Emirates have signed a deal that will allow the UAE to develop nuclear reactors and obtain nuclear fuel from the US, under the 123 Agreement framework. Under the agreement, the UAE, which is already a signatory to the Nuclear Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT), will be subjected to nuclear safeguards inspection from the International Atomic Energy Agency (IAEA), and will forgo the right to enrich/reprocess spent Uranium fuel. The whole nuclear program of the UAE will apparently be under US management, pending IAEA approval.

Since its birth in December 1971, the UAE has experienced massive economic growth on account of its petroleum reserves. This initial economic growth gave rise to two main economic power centers in this federation of seven emirates — Abu Dhabi, the capital of the UAE and largest emirate by area, whose revenues are driven by oil, and Dubai, the most populous emirate, whose revenues are driven by trade and financial services.

Economic growth lead to investments in infrastructure and construction, resulting in the arrival of hoards of blue – and white collar workers, primarily from the Indian subcontinent, to fill the employment vacuum. This sustained population growth, particularly in Dubai, has forced the UAE to consider alternative sources of energy. By some estimates, UAE’s demand for electricity is likely to rise to 40,000 megawatts (MW) by 2020. However, UAE’s energy sector is projected to be capable of meeting only about 50% of this demand.

The 123 Agreement is yet to be ratified by Congress, and will still need to be approved by the President of a new US administration. Barack Obama has not publicly stated his views on the issue. The deal has already met with vociferous disapproval from members of Congress. Rep. Brad Sherman, the chairman of the House Foreign Affairs Terrorism, Nonproliferation, and Trade subcommittee, said:

“Any (nuclear cooperation) agreement between the United States and the UAE should not be submitted to Congress until, at a minimum, the UAE has addressed the critical issue of transshipments and diversion of sensitive technologies to Iran.”

If that’s the Congressman’s line of thought, then this is yet another classic example of the kind of cluelessness that has come to typify the thinking of successive US administrations on matters concerning the Middle East. Indeed, Iran is the one country that can be counted on to get irked by the proposed deal.  Relations between “Shi’a” Iran and “Sunni-Arab” UAE have always been icy.

A major bone of contention between the UAE and Iran is with regard to the Abu Musa and Lesser Tunb islands, unilaterally occupied by Iran, but claimed by the UAE. The Abu Musa archipelago lies within the strategic Straits of Hormuz corridor, an area vital to the petroleum driven economies of the Arabian Peninsula. In addition, as Anthony Cordesman points out, there are two specific areas of concern for Abu Dhabi — (a) the presence of a significant Iranian immigrant (potential “fifth column”) population in the UAE, and (b) the strategic proximity of Dubai and Sharjah to the old Iranian port-town of Bandar Abbas. The vulnerability of the northern emirates’ shipping channels to Iran’s airbase in Bandar Abbas is a source of worry for UAE’s rulers.

For its part, Iran can’t be too pleased with the cosiness exhibited smaller Arabian Peninsular countries like the UAE and Qatar towards the United States. US military bases in the UAE, like those in Jebel Ali and Al Dhafra, and UAE’s ambivalence towards the US invasion of Iraq can’t have helped matters much either.

This nuclear deal is a bad idea — not because of an alleged UAE-Iran nexus, but because the UAE will be susceptible to an Iranian military assault either if Iran-UAE relations deteriorate, or if Iran has its back to the wall in any future US-Iran military confrontation. The UAE can ill afford be in a military conflict with Iran — the repercussions will be felt far beyond the region, given that expatriates make up about 80% of the total population of the UAE.

Allowing the accumulation of nuclear material in a politically and militarily weak country situated in the most unstable region on earth, and in the proximity and cross-hairs of Iran, is foolish. To think that this will impress upon Iran the virtues of towing Washington’s line with regard to nuclear technology is an exercise in naiveté. Far from making the UAE politically and strategically more secure, the deal will prove to be an albatross around Abu Dhabi’s neck.

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