Georgian soldiers congregate at the Manas Transit Center in Kyrgyzstan en route to Afghanistan in late September 2013. As U.S. troops, which began using the airport near Bishkek in 2001, close down their operations, Rosneft, Russia's state-controlled oil giant, wants to grab a majority stake. Credit: David Trilling/EurasiaNet

By Asel Kalybekova
BISHKEK, Apr 1 2014 (EurasiaNet)

Russia’s state-run oil giant Rosneft wants to purchase a majority stake in the state-controlled company that owns all of Kyrgyzstan’s civilian airports.

The negotiations are stoking concern in some circles in Bishkek about the potential risk to Kyrgyzstan’s sovereignty. But with its entrenched corruption, poor governance and remote location, the Central Asian country has few other options.

Rosneft’s takeover target is a company called Manas International Airport, named for the largest of the airfields under its control. In addition to Manas, which is situated outside Bishkek, the company operates 10 smaller (mostly non-functional) airports around the country.

The Manas facility has hosted a U.S. military base for almost 13 years, but the troops are packing up and are due to leave by July. Without the American spending, Kyrgyz officials argue, the company, which is 79 percent state-owned, will go into the red.

In February, Igor Sechin – Rosneft’s chairman, and close ally of Russian President Vladimir Putin – and Kyrgyz First Deputy Prime Minister Djoomart Otorbaev (who has since been appointed acting prime minster) signed a non-binding memorandum on Rosneft’s intentions to purchase at least 51 percent of Manas’ shares.

In the memo, Rosneft also promises to spend up to a billion dollars for the shares and to create “a large-scale international logistics hub.”

In a separate document, Rosneft expresses its intentions to purchase 50 percent of fuel-distribution operations at Osh airport, Kyrgyzstan’s second largest, and acquire the Bishkek Oil Company, a private company that runs a network of filling stations in Bishkek.

Manas Vice President Dair Tokobaev admits that Manas’ economic prognosis is grim unless it can find a new revenue stream to offset the closure of the American base. “We have a lot of problems. We need an investor,” Tokobaev told EurasiaNet.org.

Since 2010, when Kyrgyzstan’s government began insisting the Americans would have to leave, officials have floated the idea of turning Manas into a civilian transportation hub serving cargo and passengers transiting Asia.

In the National Strategy for Sustainable Development, President Almazbek Atambayev has made reconstruction and modernization of the country’s airports, and the creation of a global hub, one of his administration’s top priorities.

In a Mar. 27 television interview, Atambayev threw his support behind the Rosneft initiative, reasoning that Kyrgyzstan basically had no other choice. Inexpensive fuel is necessary for the airport to develop and only Rosneft is able to provide it, he said.

“Those screaming that any percent cannot be given to Rosneft, all the more so 51 percent, they, in fact, want to put an end to the future of Manas,” Bishkek’s Kloop.kg news agency quoted the president as saying.

In recent years, Russian state-controlled companies have moved aggressively to gobble up key Kyrgyz assets.

In December, for example, Moscow’s state-run giant Gazprom acquired ailing Kyrgyzgaz, which manages Kyrgyzstan’s gas-distribution network, for the symbolic price of one dollar. (Gazprom promised to invest 600 million dollars into the network and also assumed 38 million in debt.)

During discussions of the sale last summer, Kyrgyzgaz chief Turgunbek Kulmurzayev told local newspaper Vechernii Bishkek that the company was “bankrupt” and “had no other choice” but to sell.

Another Kremlin-controlled company, RusHydro, started construction of a 400-million-dollar hydroelectric cascade last June. Moreover, Russia’s state-run Inter RAO has promised to build an estimated two-billion-dollar hydropower dam, Kambara-Ata-1, further upstream on the Naryn River.

Such deals are viewed warily by some experts in Bishkek. Most readily acknowledge that Moscow is destined to exert considerable influence over Bishkek, given that Kyrgyz labour migrants in Russia generate the equivalent of about one-third of Kyrgyzstan’s GDP, and a large contingent of Russian troops are stationed in the Central Asian state.

But the steady stream of sales of state assets is making it much more difficult for Kyrgyz officials to steer an independent course.

Bishkek-based analyst Marat Kazakpaev argues that while Kyrgyzstan needs foreign investment, it should strive to attract private investors. He believes that Russia, with the recent string of deals, is expanding its geopolitical influence in the region and sees Bishkek as its foothold.

“The fact that Rosneft is a state-owned company gives this memorandum a political context. This is not business, this is politics,” Kazakpaev told EurasiaNet.org.

The challenge for Kyrgyzstan at present is that its reputation for widespread corruption and political volatility is frightening potential Western investors away.

“Let’s admit it frankly, if there will be investment, it will be from Russia. We won’t get any investment from the West,” economist Meimanbek Abdyldaev told Radio Liberty’s Kyrgyz Service. Rosneft’s interest in Manas “can be regarded as a forerunner to [Kyrgyzstan’s] entrance into the [Russia-led] Customs Union.”

Though the Rosneft memorandum is not legally binding – and any final deal to sell state-assets must be ratified by parliament – on Mar. 20, a small group of protestors gathered outside the legislature.

Rights activist Gulshaiyr Abdirasulova told Kloop.kg that Manas is a “strategic object. It’s the people’s welfare and wealth. We’re not against investments that will develop the airport, but [we want investment] without giving away a controlling stake.”

Parliamentarian Dastan Bekeshev supported the demonstrators. “If one wants to attract investors, one does it not through sale, but through opening a joint venture,” he was quoted as saying.

Rosneft did not respond to repeated requests for comment. Neither did Russia’s Transport Ministry, which is helping negotiate the deal.

Tokobaev at Manas agrees that the airport is a strategic object, but for him development is more critical than the funding source. Without investors like Rosneft, “we will be left feasting our eyes on [Manas] like a cultural memorial. Should we let it be gouged and plundered and stay Kyrgyz, or should we save and develop it together with someone?”

This story originally appeared on EurasiaNet.org.

If bacon, lobster tail and Chicago-style steaks are your thing, the last few months have been a good time to dine out in Kyrgyzstan’s capital.

An abundance of the unusual gourmet items has raised eyebrows in Bishkek, where U.S. military contractors and café proprietors claim with knowing winks that Kyrgyzstan’s sudden flood of bacon strips, seafood and steaks can only have come from one place.

An official at the nearby Manas Transit Center, a critical logistics hub for the NATO-led war in Afghanistan, admitted this month that food losses from the facility have totaled 40,000 dollars since December.

Allegations of theft from the facility are nothing new, but the latest leak appears to be distorting the city’s relatively small market for high-end meat and seafood, prompting opportunities and resentment in equal measure.

One local supplier of pork products complained bitterly that trade had been lean over recent months, something he attributes to the theft of “masses of quality American bacon” designated for U.S. soldiers and contractors. The imported bacon, he complains, is sold for 350 soms per kilo (7.50 dollars), undercutting him by about 50 percent.

Like other businessmen interviewed by EurasiaNet.org for this story, the pork supplier requested anonymity out of safety concerns, believing the flourishing contraband trade was “absolutely organised” and run by figures “either flying under the radar of, or connected to, the country’s criminal groups”.

A local café owner, who serves bacon his supplier claims comes from Manas, said that two middlemen flogging the rashers “used to go door to door. They were quite open about where it came from. But now you can get it everywhere – in bazaars, shops, supermarkets.”

When a EurasiaNet.org correspondent visited Eurogourmaniya, a new delicatessen specialising in imported products, shop assistants showed a vacuum-sealed pack of bacon identical to the one the café owner displayed. Such cuts are uncommon in Kyrgyzstan.

Though pork is widely available in Bishkek and other towns with large ethnic Russian populations, local ham is not sold in strips like U.S.-style bacon. (And though Kyrgyzstan is nominally a Muslim country, few people seem to adhere to Islamic dietary law, which prohibits the consumption of pork or alcohol.)

The base is “aware” of food losses totaling 40,000 dollars over the past three months, a spokesperson said on Mar. 1, adding that “this is the largest incident where food products have gone missing that the Transit Center is aware of.” The Manas spokesperson refused to discuss which specific items have gone missing.

This won’t be the first time the Pentagon has been accused of wasting federal money in the Central Asian state. In 2011, a 750,000-dollar women’s shelter that opened with much fanfare the year before was found deserted; it had cost one-third of Manas’ annual humanitarian budget.

Manas is “reviewing current operating procedures”, the spokesperson said. Base officials are working hard “to ensure subsistence food items are only used for their intended purpose by their intended recipients”.

But what may be an embarrassment for the U.S. is a business opportunity for others.

A waitress at a 24-hour Bishkek lounge, Live Bar, boasted that the restaurant’s menu had “expanded since December”, to include lobster and various types of steak, two items that are thought to have gone missing in large quantities from Manas in December. The waitress claimed the lobster was “imported”, although she could not cite its provenance.

Another restaurant in the capital celebrated Defenders of the Fatherland Day in late February with a crab and beer night. Kyrgyzstan is landlocked and shellfish is not a staple on most restaurant menus.

Another restaurant serves A.1. Steak Sauce in bottles marked, in English, “not for resale”, suggesting it is not procured on local markets.

One U.S. defense contractor with almost eight years experience in Kyrgyzstan said theft from Manas has been common “almost since the base arrived” in 2001.

“A few years ago we had ‘sweetgate’ – local guys getting caught leaving the base with packs of jelly beans duck-taped to their chests. But this thing is bigger. This stuff must be going out with the waste,” he told EurasiaNet.org.

On the contractor’s recommendation, a EurasiaNet.org correspondent visited Yolki Palki, an upmarket restaurant selling T-bone steaks that contractors say bear a striking resemblance to the steaks served at Manas.

Succulent and tender, the meat was certainly a cut above the beef sold in local markets. But unable to extract detailed information about the steak’s origin from the restaurant’s manager, EurasiaNet.org cannot verify on taste alone the contractor’s claim that Yolki Palki’s steaks are “Chicago good”.

*This story originally appeared on EurasiaNet.org.