Fw: Kazakstan

Ulhas Joglekar ulhasj at SPAMbom4.vsnl.net.in
Sat Nov 20 04:57:37 MST 1999

----- Original Message -----
From: <alert at stratfor.com>
To: <redalert at stratfor.com>
Sent: Thursday, November 18, 1999 6:53 AM
Subject: Kazakstan

> STRATFOR.COM's Global Intelligence Update - November 17, 1999
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> STRATFOR.COM Global Intelligence Update
> November 18, 1999
> The High Price of Kazakstan's MiG Affair
> Summary:
> Kazakstan has announced that it has completed its investigation
> into the illegal sale of MiG-21 fighters to North Korea. The
> completion of the investigation is likely to defuse a threatened
> U.S. suspension of aid. But the incident has weakened relations
> between the Central Asian nation and the United States and will
> push Kazakstan closer to a regional power, such as Russia and
> China. Relations between Astana and Moscow are so strained right
> now that the Kazak government will likely grow closer to China, at
> least in the short term.
> Analysis:
> Kazakstan's intelligence service announced Nov. 17 that its
> investigation into the illegal sale of MiG-21 fighter aircraft to
> North Korea was complete and that senior government officials had
> been involved, according to both local and international news
> reports. The current scandal is the second incident involving MiGs
> in the last six months, creating an ongoing embarrassment for
> President Nursultan Nazarbayev, who has worked hard to establish
> ties with the West.
> Two recent scandals have revolved around Kazak MiG fighters. In
> March, six jets were detained on a circuitous route to North Korea.
> Transported aboard a Russian cargo plane, the crated jets were to
> be taken through the Czech Republic to North Korea. But the cargo
> plane was detained in Baku, Azerbaijan and routed back to
> Kazakstan. Kazak authorities launched an investigation but halted
> it in May, concluding that the shipment was just a huge
> misunderstanding -- not a criminal offense. In August, news reports
> indicated that North Korea had purchased 30 to 40 Kazak MiG-21s.
> The sales so threatened to upset Kazakstan's ties with the West,
> that Nazarbayev fired Defense Minister Mukhtar Altynbayev and the
> chairman of the country's security committee, Nurlan Balgymbayev,
> on Aug. 9 for failing to fully investigate the March incident
> [ http://www.stratfor.com/cis/commentary/c9908102325 ]. Prime
> Minister Kosymzhomart Tokayev assured Western countries that the
> Kazak government had no knowledge of the sale, and requested that
> North Korea return the planes. North Korea has at various times
> declined to return them and even denied knowledge of the planes.
> The sales and the recent conclusion of the investigation have upset
> the delicate balance of Kazak foreign policy. Newly independent is
> also newly deprived of its major customer for its heavy industrial
> products, Russia. Kazakstan is rich in resources but dependent on
> foreign investment to develop its infrastructure. Like its Central
> Asian neighbors, Kazakstan is strategically located, but not
> politically or economically strong enough to fend for itself. It
> needs to ally itself with a stronger power, such as the United
> States, Russia or China. So far, Nazarbayev has favored Washington.
> But the MiG affair has thrown a wrench into relations with the
> West. The United States has responded with threats to suspend the
> $75 million in aid it supplies Kazakstan each year. In addition,
> the Organization for Security and Cooperation in Europe has alleged
> that the government has tampered with elections, further cooling
> relations between Washington and Astana. While the United States is
> likely to continue aid - as long as Nazarbayev fires the implicated
> officials - the flow of cash is unlikely to increase. The U.S.
> Congress, already tightfisted on foreign aid, will not be easily
> convinced to send more money to a nation, which has exported
> weapons to a sworn enemy.
> More importantly, the MiG scandals threaten the meager flow of
> foreign investment that helps prop up Kazakstan's economy. Both
> U.S. and South Korean investors - major investors in developing
> Kazakstan's natural resources - are likely to be restrained by
> their governments. This threatens millions of investment dollars
> for the oil, gas and metallurgical industries; Kazakstan was
> already strapped for funds before this crisis of confidence.
> With Western help unlikely, Kazakstan will increasingly need to
> turn to a regional power for both money and possibly security.
> Relations with Russia are rocky. Russia is a major partner in Kazak
> oil exploration and export but tensions have arisen in other areas,
> such as the use of Kazakstan's Baikonur space launch facility.
> [ http://www.stratfor.com/SERVICES/GIU/110499.ASP ] Following an
> accident, the Kazak government banned Russia from using its launch
> facilities until at least February 2000, and demanded financial
> reparations. The two governments are still haggling.
> This places China in a particularly favorable position. In the
> absence of Western assistance, China by default is the best partner
> around - at least in the short term. This would be great for China,
> which needs fuel and is eager to invest in Kazakstan's vast,
> undeveloped oil fields. As for the MiG issue, China is unlikely to
> complain. Although the illegal exports were making their way to
> North Korea via China's competitor in the region, Russia, China has
> the closest ties to Pyongyang
> [ http://www.stratfor.com/SERVICES/GIU/102699.ASP ]. Nor is Beijing
> likely to be concerned about North Korea's arms, since Beijing uses
> its neighbor's belligerence as a lever in negotiations with the
> West [ http://www.stratfor.com/SERVICES/GIU/071299.ASP ].
> China also has strategic interests in befriending its Central Asian
> neighbor. Like Russia, China wishes to contain Islamic unrest in
> Central Asia and to protect the integrity of its borders. China has
> recently stepped up its efforts to befriend its neighbors, taking
> part in talks to reduce military forces along the region's borders.
> The wealth of Kazakstan's resources, waiting to be mined, is also a
> major lure.
> Black market weapons exports have become quite common in the former
> Soviet states. Selling old tanks, small arms and even jets has
> become a source of quick cash. But for Kazakstan, the sale of these
> 1960s-era jets has yielded an extraordinarily poor return on
> investment; just $8 million may have gone either to government
> coffers or the pockets of corrupt officials. The cost of this
> transaction may now be calculated in the country's strategic
> direction.
> Editor's Note: The Global Intelligence Update of November 17, 1999
> incorrectly characterized the composition of the Kuwait's air
> force. The air force includes U.S.-made F/A-18 Hornet strike jets.
> (c) 1999, Stratfor, Inc.
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