Oleg Barabanov, Senior Researcher, Russian Institute for Strategic Studies, Moscow
This article explores the history and future of the Greater Altai cross-border cooperation project which has been a topic of much discussion since 1998. Initially, local proposals regarding this plan never extended beyond certain ecological schemes. Since summer 2000, however, it has moved on a step and has been discussed in more detail with both the local authorities and non-governmental organisations – to the point where they are talking about a full-scale cross-border alliance modelled on the Euro regions. That is, the creation of an ‘Altai Mountain region’, which the Russians call Greater Altai (Bolshoi Altai) and the Chinese refer to as the East–Central Asia economic zone.
Four regions share a border and would thus be involved in this project: the Altai krai and the Republic of Altai (Russia), the East Kazakhstan oblast (Kazakhstan), Bayan-Olgiy and Kodbos (Mongolia) and the Altay prefecture of the Xinjiang Uighur Autonomous Region (XUAR) in China.
In September 1998, a conference on development of the region took place in Urumchi (the administrative capital of the XUAR). At this meeting, the Altai Declaration was jointly released by the government of Russia’s Altai Republic (on behalf of its environmental department), the administrations of East Kazakhstan oblast and the XUAR and the aimak (local administration) of Bayan-Olgiy. The declaration had two central themes. The first was a call for a concerted effort by all bordering countries to protect the Altai Mountain nature reserve. The second was a call to set up a cross-border network of national parks already in existence in these regions. The declaration also stipulated that the four states should enact a treaty on the steady development of the Altai region, to be called the Altai Convention. Furthermore, it stated that each environmental-protection department would be acting on behalf of its respective government, and that these four regions would simply be referred to as ‘The Four States’.
During summer and autumn 2000, a new round of conferences on economic aspects of cross-border integration in Altai was convened in the four regions (supported by the respective local authorities). In July 2000, at a conference in the town of Altay in the XUAR, a ‘declaration on the development of transnational cooperation in the Altai Mountain region was approved. And a conference at Lake Aya in Altai krai (also in July 2000 ) launched the Altai Mountain Forum, which now holds regular meetings.
Consequently, a political and ideological concept for Greater Altai as a cross-border grouping of the given regions was proposed. The local authorities of the four regions approved it on 1 November 2000, at which time the Altai krai administration organised another international conference on Greater Altai in Barnaul. It was suggested that the Euro regions – cross-border alliances between European Union (EU) countries and neighbouring states – could proffer an integration model for Altai to follow. In the conference’s final declaration it was noted that Greater Altai is an indispensable part of the ‘New Asia’ based on inter-regional cooperation.
The Russian Ministry of Foreign Affairs did not raise any objection when the Altai krai administration proposed the Greater Altai concept. That fact shows that the proposed project is not inconsistent with Russia’s national interest in this region.
At the conference in Chinese Altay, various presentations were given by the XUAR’s Commission for Science and Engineering and the Commission for Trade and Economics. They enumerated the main reasons why Xinjiang leaders had taken an interest in developing an alliance with the Altai region of Russia. Among the key points were the proposed collaborative development of a cattle-breeding hill pasture and implementation of a project focusing on the general restructuring of the cattle trade (the creation of a joint tannery and fur business, among others). The prospect of establishing a joint mineral-extraction project (there are small deposits of copper, gold, lead, mercury, nickel, zinc and semi-precious stones there) was something that also appealed to those present. In Chinese Altay and Mongolian Altay there are some coal reserves. Representatives of the XUAR called for joint prospecting and stated that an effort should be made to search for deposits. In addition, there was a call for the use of Russian and Kazakh mountain technology in Xinjiang. Another point of interest was mountain tourism.
One last aspect, which is actually the most important, is the proposal to develop jointly a transport infrastructure in the Altai region. There is a 55-kilometre impassable stretch on the western side of Russia’s border with China. Those who attended the conference supported the idea of constructing a direct motorway along this part of the Russo-Chinese frontier via the Kanas border crossing. Currently, the Altay prefecture of the XUAR has two border crossing points with Kazakhstan (the one at Timunai is permanent, and another is temporary). There are also two seasonal crossing points on the Chinese-Mongolian border. Because these crossings have bilateral status, Russian citizens and goods cannot cross there. As a result, trade between southern Siberia and western China is conducted via long circuitous routes and the intersection where China meets southern Kazakhstan.
The idea for a direct transport route has found support among Russian regional leaders. The head of the Altai krai administration, Alexander Surikov, is one of those in favour of building the road. Apart from the fact that it would help to facilitate trade between the south Siberian regions of Russia and western China, another appealing aspect is that it might constitute a Russian alternative to the ‘Great Silk Route Project’, which involves the construction of a main transport corridor via Central Asia, connecting Europe with China (by-passing Russia).
On Surikov’s initiative, the cross-regional alliance, The Siberian Accord, approached Russian President Vladimir Putin, who offered federal support for the road scheme. Russia’s Ministry for Economic Development and Trade has been given responsibility for this project. Russia’s Ministry of Foreign Affairs has approached leaders in Beijing about the proposal, but they, in contrast to the leaders of Xinjiang, have been somewhat reserved in their attitude to it.
It is mostly local ecologists and a group of Altai interest groups that are against the construction of the road. Protest is based on the fact that the Ukok frontier mountain plateau, which the road would cross, has been declared a ‘Peaceful Zone’ (with regard to nature as well as in the cultural- religious sense (as the Altai people see it)).The main organisation acting as the mouthpiece for those opposing the road is Altai krai’s State Assembly.
Thus, practically from the outset, the Greater Altai integration project comprised two different elements: the economic and the ecological. The ecology camp has stated that the whole Altai mountain region must be transformed into a Peaceful Zone. It feels that the elaborate business projects planned for the region should be suspended and that, instead, a concerted effort must be made by all parties primarily to create a cross-border network of nature reserves and tourism. The economic camp, meanwhile, states that infrastructure development is the main priority. It is the latter that has the support of the executive authorities of the given regions.
The two different perspectives on integration vis-à-vis the Greater Altai Project differ greatly. Increased activity in regard to the planned road has led to a rise in the number of people openly opposed to it. At the end of 2000, the media in Barnaul began to conduct an information war. It went as far as hinting that those in favour of the project were the Chinese, and that those against it were agents of the US (since they are funded by American ecological foundations).
The road project has become one of many political issues dividing Altai krai government departments. At the same time, the project has demonstrated that the business communities of the Altai krai and the Altai Republic are, in effect, in agreement. All of this has allowed the local media to place the possible reunification of the krai and the republic as a single administrative entity back on the political agenda. (Until 1991, the Altai Republic was known as Gorno-Altaisk Autonomous okrug and was a constituent part of Altai krai.)
One of the arguments that opponents have posited for challenging the road’s construction is that they fear that Chinese expansion could swamp Altai. Those in favour, by contrast, say that there are almost no Chinese people in Altai at present in comparison to the number in other parts of Siberia. They claim that this is related not to the absence of roads but to the depressing state of the krai’s economy. Another argument is that the road would allow Russia to infiltrate the Altai region of Xinjiang to a great extent and to keep an eye on developments in this border region. This is crucial from an ecological point of view, since water from the upper reaches of the Irtysh River, which flows through Xinjiang (and on into Kazakhstan and Russia), is being diverted within China. This is giving Kazakhstan and Russia cause for great concern, as the flow has been reduced in their countries and they fear a repeat of the Aral Sea catastrophe (where diversion of rivers for irrigation caused the sea level to drop dramatically with huge ecological consequences). Even historical arguments have been employed in this controversial debate, such as the fact that the northern parts of the XUAR have always sought independence. In the 1940s, they sought to establish the East Turkistan Republic.
Construction of the road was most intensively debated at the end of 2000; talks continued well into the first half of 2001. After this, the storm abated, primarily because the Chinese and the Russians were making no headway in their negotiations. As a result, plans to construct the Altai–Xinjiang highway have practically come to a halt. Furthermore, they are gradually being sidelined by a proposal to construct gas pipelines from Gazprom sites in Siberia across the Altai krai to the XUAR (the ‘Western route’), to enable transportation of Russian gas to China. This project has a much better chance of coming to fruition.
Some new ideas on how the Greater Altai project might be implemented emerged when Mikhail Lapshin became head of the Altai Republic at the beginning of 2002.With the Russian government promoting cross-border cooperation, cross-border collaboration projects in the Altai region acquired a more ambitious format. Previous work on the project has shown that it is almost impossible for any joint decisions to be made at the regional level, as the Kazakh and Xinjiang regional governments enjoy little or no autonomy. Hence, the Altai Republic government has devised a project that aims to set up the ‘Altai Four’, comprising China, Kazakhstan, Mongolia and Russia. Ideally it would involve the highest ranking officials or the heads of the central governments of these countries. The Altai Four would function either as an independent body, or within the framework of the Shanghai Cooperation Organisation (although Mongolia which is not a member of the SCO would have to build closer ties with the SCO) . Only time will tell how realistic this is.
While the Greater Altai project remains in the pipeline, other projects for bilateral cross-border regional cooperation are taking shape.
Bilateral ties between Altai and Xinjiang (XUAR)
Over the past few years, a concerted effort has been made to improve relations between Altai krai and the XUAR. The two regions made their alliance official when they signed an agreement in September 1998. Subsequently, during Chinese Prime Minister Zhu Rongji’s visit to Moscow in February 1999, four agreements were signed on cooperation between Chinese and Russian border regions. One concerned the Altai krai and the XUAR. At the beginning of April 1999, a delegation from Altai krai, headed by Governor Alexander Surikov, paid a visit to the Xinjiang autonomous region. During this trip, agreements were concluded on the trading of Chinese cotton for Altain timber and on the purchase of Chinese paper-production equipment for the Polyeks factory and others in Biisk.
Consequently, the relationship between the two regions is improving at an ever-increasing rate, with talks between the regional governments occurring on a regular basis. It should be noted, however, that the Chinese side is represented by officials from the regional government of the XUAR and not by local authorities from the areas of Xinjiang that border Russia.
In addition to economic ties, the Altai krai authorities intend to propose that Russia’s Ministry of Foreign Affairs establish consulates in Xinjiang. This is due to the growing number of business delegations and tourist groups coming and going between Russia’s southern Siberian regions and Xinjiang. A Russian consulate would be set up in Urumchi and a Chinese consulate would be established in a town in south Siberia, either Barnaul, Krasnoyarsk or Novosibirsk.
Particular interest is being shown in cooperation between Russian Altai and other regions of Siberia and Central Asia. The reason for this is that, in Soviet times, thanks to the Turksib railway, the majority of business activity in Altai focused on buying Central Asian raw materials, as well as on selling Russian goods to these republics. During the Soviet era, 30% of Altai krai’s output was sold to Central Asia. This is precisely why Altai krai – out of all of Russia’s border regions – has suffered the most as a result of the breakdown in relations with Central Asia since the collapse of the Soviet Union. This situation has badly affected many Altai industrial sectors, particularly light industry, the chemical industry and machine-building for the agricultural sector.
All of the biggest textile companies in Altai krai (such as Melangist, a blended yarn industrial complex based in Barnaul, and the Barnaul Cotton Industrial Complex AO) used to rely on cotton purchased in Uzbekistan. Thus, since 1991, these firms have experienced a significant drop in production, as have other clothing-industry factories that depend on them. Light industry has begun to lose its once significant status in Altai krai’s industrial profile. Although in 1991, light industry comprised 13.2% of the krai’s entire industrial output, this figure dropped to 9.4% in 1993, 6.6% in 1994 and 3.8% in 1995. A good example of this is the krai’s production of cotton fabric, which fell from 208,713,000 cubic metres in 1992 to 9,156,000 in 1991. The number of people employed in the light-industry sector as a proportion of the total workforce in the krai fell from 9.6% in 1991 to 6.1% in 1995.
Another sector that has been badly hit is machine-building for the agricultural sector, which used to account for 30% of all machine-building and metal work in Altai krai. The biggest companies in this field are Alltrak, which was a former tractor factory in Rubtsovsk, AltaiDiesel (Barnaul), a factory in Rubtsovsk that produces electrical equipment for tractors, AO Traktorzapchast (Rubtsovsk) and Sibagromash. Central Asia was the primary market for these products during the Soviet period. As a result of the post-Soviet breakdown in ties, actual production capacity in 1995 stood at only 7% for tractors, 4% for ploughs and around 1.5% for combine harvesters. To be more precise, Altai krai produced 20,127 tractors in 1991 but this fell by almost 90% to 2,382 in 1995, a figure that was almost halved again in 1996, when only 1,279 were produced. The number of tractor ploughs produced decreased from 67,918 in 1992 to 782 in 1996.
In total, towards the end of the 1990s, industrial output of Altai krai factories that had links with Central Asia fell by 80% compared with 1991. In that same period, 15,000 jobs were lost at these factories. For these reasons, the administration of Altai krai has taken a number of steps to revive contacts with the countries of Central Asia (in the first instance with Kazakhstan, Kyrgyzstan and Uzbekistan), so that links are based more on a institutionalised level. In particular, in October 1997, at a meeting of the Siberian Accord, Altai krai’s administration proposed creating an international business centre called Siberia–Central Asia in order to facilitate contact between businesses and to coordinate these contacts from the Russian side on a regional basis. The proposal received the full support of the inter-regional association. The September 1998 international exhibition and cross-border trade fair – ‘Siberia–Asia 98’ – in the Altai krai city of Rubtsovsk serves as proof of this regional coordination. Over 100 companies from various regions in Central Asia, China and Siberia took part. One of the events was a special meeting entitled ‘the problems and practice of cross-regional collaboration and cross-border trade’. This particular session was able to address the problems of cross-border cooperation not only on the bilateral level but also on the multilateral level. It was at this conference that the idea for a quadrilateral economic cooperation project in Greater Altai was first voiced.
As far as Kazakhstan is concerned, it was at this conference that the Altai krai finalised its cooperation agreements with Pavlodar and East Kazakhstan oblasts.
In regard to the final proposals concerning the expansion of cross-border regional cooperation, one point worth mentioning is the fact that, in May 2002, the Altai krai administration held talks with representatives from the East Kazakh oblast, Kazkommerzbank and the agricultural industrial investment bank, Djardemargo. During these negotiations, the parties were able to reach agreement on Kazakh investment in Altai krai’s food industry, which was then undergoing restructuring.
At that time, Russo-Kazakh regional cooperation in the area around the Altai mountains was becoming complex due to the smuggling of goods across its borders. It is a sad fact that collaboration between the respective countries’ law-enforcement agencies and customs officials has not yet reached the level necessary to curtail such activity.
By way of example, Kazakhstan’s introduction of an additional customs tariff (amounting to 2% of the value of the good) had a serious negative effect on commercial trade between Central Asia and Siberia. In particular, this transit tariff led to a nine-fold decrease in the quantity of goods being conveyed by Altai krai companies via Kazakhstan.
Soft security and the porous border
Yet another problem in regard to Russia’s relations with Kazakhstan is that the border between them is lacking the necessary infrastructure for border controls. The fact that the border has effectively been left open, the existence of a large number of circuitous routes through the mountains of Altai krai (which are passable for most of the year) and absence of natural boundaries all facilitate the illegal (untaxed) export from Russia of strategically valuable raw materials and products. In addition, the transparent border allows narcotics originating in Kazakhstan and other parts of Central Asia to be imported into Russian territory.
The Tajik and, on occasion, Uzbek Diaspora in Siberia have been involved in the transit of narcotics. Police estimates show that sales of fruit and other foodstuffs from Central Asia to Siberia are simply not cost-effective once transportation costs and bribes have been taken into account. This implies that, according to local police, food traders are simply a cover for the smuggling of narcotics, which are then sold in Siberia. The location of the Russian Altai customs checkpoint in Rubtsovsk actually aids the illegal import of drugs. It is a stone’s throw away from the border and near the main transport arteries – the Trans-Siberian Railway and a road on the same route – running from Kazakhstan via Altai krai to other parts of Siberia. There are only a few villages on the route, Veseloyarsk being the main one. For a small fee, though, train drivers can be bribed to stop their trains and unload their wagons at any point. The inhabitants of these villages essentially live off the money that comes from narcotics transited through their villages, as well as from other smuggled goods that are transported to other stops on the Trans-Siberian Railway, primarily Pospelika (avoiding the Rubtsovsk customs checkpoint). As a result, most narcotics are distributed on Russian territory well before the vehicle they were shipped in has reached a customs checkpoint.
Kazakh police, meanwhile, are effectively blocking proposals by their Russian counterparts for cooperation and joint operations to curb drug trafficking across their shared border. A signed agreement is the only outcome of attempts by Altai police to foster cooperation with Kazakhs. In practice, however, the Kazakhs have not engaged in any joint operations to date and have categorically rejected proposals that might allow Russian policemen from Altai access to Kazakh territory to carry out operational manoeuvres.
Links with Mongolia
Another set of bilateral and multilateral economic projects is being established in Mongolia. The most significant is the Millennium Road Project, a plan to construct new roads and to modernise existing ones in the Trans-Mongolian network, which will link east and west Mongolia. A few branches will also connecting north and south Mongolia. Chinese and Japanese companies are showing great interest in this scheme. The Mongolians and the Japanese have reached agreement on nearly all of the eastern sections of the road. China has already modernised its highway, which stretches from Ulan Bator to the northern border of Mongolia (although the Mongolians are not impressed with the quality of the work carried out by the Chinese). Companies from the Xinjiang autonomous region have offered to construct gratis a road that will run from the Chinese border to Kodbo. They have also made it clear that they are ready to participate in the construction of other sections of the network in western and southern Mongolia.
Russian representatives have been approached by the Mongolians to modernise the western section of the road, which stretches from the Altai Republic to Kodbo and beyond. However, Russia has refused to build the road for free, and the Mongolians do not have enough funds to pay for it. The Mongolian government, therefore, has issued an alternative proposal: it wants to receive a tied loan from the Russian government on favourable terms on condition that Russian contractors will conduct the construction work. The Russian government is considering the proposal.
It goes without saying that modernisation of roads in western Mongolia will certainly play a significant role in increasing trade and investment between neighbouring countries. Hence, it is clear that the country most active in implementing this project will be in the best position to reap benefits in terms of future trade and business.
Mongolia is also proposing that the authorities in the Altai Republic become involved in the reprocessing of Mongolian silver and metallic-ore deposits, which are situated in northwest Mongolia near the Russian border. This project is certainly an attractive one from a financial perspective.
There is much cooperation between the Russian border regions and Mongolia. Siberian regions are beginning to work together in their efforts to expand cooperation with Mongolia. In particular, the Siberian Accord is now revising its plan to set up an association for cross-border cooperation between Mongolia and all Siberian regions with a view to making regional interaction more effective.
Thus, at present, the four parties in the Altai area (Russia’s border regions, China, Kazakhstan and Mongolia) are actively increasing the level of cooperation between them. Furthermore, this cooperation could be transformed into the multilateral Greater Altai project if their central and local governments have the political will to do so. If this does happen, we will be able to assert that other parts of the world have learnt from the EU’s experience. . We might also be able to talk about establishing AsiaRegions as an analogy of the EuroRegions. In Asia, these could have an impact on strengthening international security and stability. However, even now, the ideas themselves serve as a stimulus for developing and intensifying economic and cultural collaboration at the crossroads of Central Asia and Russian Siberia; cooperation which will undoubtedly be beneficial for all parties.
