Michael Ochs, PhD is a Professional Staff Advisor at the Comission on Security Cooperation in Europe, US Congress. This article is adapted from the Comission's report on the December 1994 parliamentary election in Turkmenistan.

Geography is a mixed blessing. A country the size of California, with a small population ( around 4 million) and vast underground energy reserves, Turkmenistan seems primed to become the future "Kuwait" of the former Soviet Union. But in order to exploit this natural wealth, the regime will have to overcome Turkmenistan's lack of access to international waterways and the disadvantages of bordering pariah-state Iran and the strife-torn Afghanistan--as well as problematic relations with Moscow.

Turkmenistan was one of the least developed former Soviet republics before becoming independent in October 1991. President Saparmurad Niyazov, generally called Turkmenbashy (leader of the Turkmens), has eschewed serious economic reform, which could improve long-term economic prospects but could weaken his hold on power and risk short-term disruption. Preaching the overriding priority of stability and proclaiming the uniqueness of Turkmenistan's path, Niyazov has maintained state subsidies of basic goods and services. Many prices remain regulated and small scale privatization has only just begun.

Nevertheless, inflation has already struck hard at people's living standards. Niyazov's basic governing strategy is two-fold: to suppress any possible expressions of discontent through Soviet-era controls on the population, enhanced by a full-fledged personality cult around himself; and, to use projected profits from the sale of Turkmenistan's natural gas deposits to Europe and Asia to obviate, or al least alleviate, the hardship of economic reform, thus maintaining stability and control. In short, the regime is in a race against time, hoping for an energy-generated windfall before the patience of a long-suffering people evaporates.

The fly in the ointment for landlocked Turkmenistan is the absence of a gas pipeline to the outside world, independent of the Russian controlled grid. In November 1993, Moscow cut Turkmenistan's access to a Russian pipeline to Europe and redirected the gas to Ukraine and Transcaucasian countries. Problems in collecting payment from them and Moscow's show of control, spurred Niyazov to accelerate the construction of a pipeline from Turkmenistan through Iran to Turkey and thence to Western Europe. The pipeline could potentially transport some 28 billion cubic meters of gas annually, providing Turkmenistan with substantial hard currency revenues.

The plan faces serious hurdles, though, starting with financing. Turkmenistan is supposed to cover its own expenses, with Turkey and Iran paying for part of the sections passing through their respective territories. But costs are estimated at $7 billion, and outside help is doubtful: Iran's involvement raises blood pressure in Washington, which exerts considerable clout in international financial institutions. further dampening the enthusiasm of prospective lenders are pipeline security problems in Turkey, where the army has been battling a Kurdish insurgency for years.

The project also holds political risks for Ashgabat; though Niyazov has worked hard to establish good relations with his southern neighbor, Tehran would love to sell its own natural gas to Europe and does not need competition from Turkmenistan. Relying on a pipeline through Iranian territory would make Turkmenistan dependent on a country that has historically difficult relations with Turkmenistan, that pretends to regional dominance, and that also propagates militant Islam--which is anathema to Niyazov's staunchly secular regime, despite his careful overtures to religion.

Ashgabat's relations with its northern partner are no less difficult. Russia is a member of the pipeline's inter-state council, but Moscow's good faith involvement in the project is open to question. Russia, like Iran, seeks to earn hard currency by selling its natural gas to Europe and has agreed on a new pipeline through Poland instead of Ukraine, which Moscow has accused of siphoning Russian gas. Moreover, Moscow has consistently tried to keep Kazakhstan and Azerbaijan from developing their own pipelines to transport oil to Europe. Turkmenistan's successful construction of a gas pipeline outside the Russian grid would be a dangerous example from Moscow's perspective, especially since neighboring Kazakhstan and Uzbekistan might be able to use Turkmenistan's new outlets, lessening their dependence on Russia.

To head off open interference and pressure, and to assuage Moscow's general concerns about Russians in the "Near Abroad", Niyazov agreed in December 1993 to introduce dual citizenship with Russia. (Turkmenistan is the only former Soviet republic to have done so. By interesting contrast, even Tajikistan, which depends totally on Moscow for political, military and economic aid, has thus far resisted). Officials in Ashgabat claim that Russia will benefit economically from the pipeline and really wants it to succeed. But more likely, Russian involvement will give Moscow an opportunity to control, or at least to influence, Turkmenistan's vital natural gas sector. More cynical analysts believe Moscow joined the consortium on the assumption that the project would go nowhere, because of insuperable problems with financing and pipeline security; Russia had therefore nothing to lose by its involvement, while posing as a well-meaning partner.

In fact, some observers suspect that Moscow and Tehran are in accord about the pipeline and the region generally, as they share some basic concerns. Both countries are anxious about the growing rapprochement among the Turkic states--Azerbaijan, Turkey, Kazakhstan, Uzbekistan and Kyrgyzstan--and their positions on the Caspian Sea controversy appear, for now, to be similar. (Mekhtiev, "The Current Status of the Caspian doesn't suit Russia", Nezavisimaya Gazeta, June 15, 1994) Though intriguing, this theory is hard to prove, not least because the situation in the region changes all the time and the parties are constantly reassessing their best prospects and alliances.

For all these reasons, the outlook for a pipeline through Iran is dim. Hedging his bets, Niyazov is looking south and eastward, resurrecting historic trading ties after decades of Soviet-enforced isolation and planning to build pipelines through Afghanistan to Pakistan, India, China and Japan. In October 1994, Azerbaijani President Aliev, Turkish President Demirel, Iranian President Rafsanjani and Pakistani Prime Minister Bhutto came to Ashgabat to mark the third anniversary of Turkmenistan's independence (President Yeltsin evidently wasn't invited or couldn't make it). They signed agreements on trade and economic cooperation and endorsed plans to develop links via northern Afghanistan to Pakistan, which would buy Turkmenistan's gas, and serve as transit for gas sales farther East.

An estimated one-two million Turkmens live across the border in northwest Afghanistan. Turkmenistan has opened two consulates in Afghanistan, one in Mazari Sharif and the other in Herat. Niyazov has several times received General Dostam, commander of the northern groupings--to attend the 1994 anniversary celebrations. Turkmenistan is already supplying northern Afghanistan with electricity. Niyazov has declared the Turkmenistan-Afghanistan border a zone of peace and friendship and General Dostam has promised that the 600 kilometers of the border under his control will remain quiet.

Niyazov has thus tried to secure Turkmenistan against imponderables in war-ravaged Afghanistan, including the possible breakup of the country. By establishing working relations with the local warlords, he hopes to avoid instability on his borders. In the best case scenario, the groundwork could also be laid for the construction of a pipeline across safe, or friendly, territory to huge Eastern markets.

Theoretically, Turkmenistan could also build a gas pipeline under the Caspian Sea, reaching across to Azerbaijan and bypassing Iran and Afghanistan. But pipelines under bodies of water are very expensive which raises familiar financing problems. Russia could also raise objections, arguing, as it has done with Azerbaijan, that the Caspian's delicate ecological balance must be protected and threatening to scotch any deals with Western partners. Even with a pipeline to Azerbaijan, tough decisions would still have to be made about how to get the gas to Europe

Nevertheless, unless Niyazov is prepared to live indefinitely with Moscow's arbitrary control of existing pipelines and to rely on payments from cash-strapped former Soviet republics, he has little choice but to pursue these various projects to better customers outside the former USSR He will likely continue his outreach to the south, while steadfastly claiming in public that Russia remains Turkmenistan's most important partner. For now, the Iranian option is the farthest along (or at least the most publicized), and Niyazov signed contracts in December 1994 with Austrian firms for piping.

U.S. Policy: Turkmenistan's geo-political strategy aims at playing off Russia and Iran against the other, while not becoming too dependent on either. Ashgabat hopes the United States will support its independence by providing a counter to these regional powers, Though Niyazov always speaks of Turkmenistan's good relations with Russia, he, like the leaders of most former Soviet republics, is especially fearful of Russian domination and attempts to control Turkmenistan's natural resources, as well as its access to the outside world. Turkmenistan joined NATO's Partnership for Peace in May 1994, a signal of its desire for contacts with the West.

From Washington's perspective, Turkmenistan is a politically repressive country whose regime has demonstrated no willingness to open its political system, despite repeated representations by US officials to Turkmenistan's authorities about human rights. On the other hand, Turkmenistan is trying to safeguard its independence and develop alternative pipeline routes to transport essential natural resources to the outside world. These pipelines could protect Turkmenistan against Russian capriciousness and pressure, while providing critical natural gas to Turkey. Turkmenistan's success could encourage other resource-rich CIS countries, such as Azerbaijan and Kazakhstan, to persevere with their own pipeline projects. In addition, Washington hopes that Turkmenistan's gas will supply critically important Ukraine with the energy necessary to maintain its own independence and get on with economic reforms. (In November 1994, the Clinton Administration persuaded Niyazov to continue providing gas to Ukraine, whose debt was restructured as a loan at eight percent annually for seven years).

Still, under current conditions, a Turkmenistan-Turkey pipeline through Iran is hard for Washington to swallow. The US government sees Iran as a destabilizing force that promulgates Islamic fundamentalism and seeks to disrupt the Middle-East peace process. In January 1995, Secretary of State Christopher restated the warning that Iran is engaged in a crash program to develop nuclear weapons, and said that countries aiding Iran economically are abetting terror. Revenues from transit fees on Turkmenistan's pipeline and from the sale of its own gas to Europe could prop up an unreformed government in Tehran.

Washington might not oppose such a project only in one of two scenarios: substantive change in Iran's regime and/or policies; or, a determination that it is strategically more important to secure the independence of Turkmenistan (and other Soviet republics) from Russia than it is to contain Iran. In the short term, both of these are improbable.

Caspian Crossroads, Num.1, Winter 1995