Thursday, August 02, 2007

When you are a poor yet oil rich nation

Beware of neighbors bearing gifts:

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Beijing now has trade missions in every Central Asian country: it's investing in local enterprises and donating money to aid projects.

And by filling the markets with plastic fans and cheap DVD players, China is becoming an increasingly powerful player.

"We'll have shopping malls, business centres, restaurants, hotels, anything your heart desires," Ibragim described.

But when asked about the common fear that China's growing economy may overpower its smaller neighbours, Ibragim laughed and said that he was not allowed to comment.

"Official policy here is to say that China is a very good neighbour, but unofficially there are plenty of fears," said Dostym Satpaev, the head of the regional Risk Assessment Group.

There is, Mr Satpaev says, a real worry in the region that China will simply become too much to handle, and that the growing number of goods and people it sends will pose a serious demographic and economic threat.

"When it comes to China, Kazakhstan is in a tricky position. We need to remember that China is our neighbour, a very ambitious neighbour and economically a very strong neighbour. So we need good relations with Beijing.

"But at the same time we should be wary about its increasing activity here and what consequences it may have," Mr Satpaev said.


The region's growing reliance on Chinese goods is a major source of Beijing's new political leverage in the energy-rich region.

"China went from being a non-player in the 1990s to becoming a major geopolitical force, and its role is still growing," said Dostym Satpaev of the Risk Assessment Group.

"But the problem is that the only thing China is interested in are the region's minerals; oil, gas, natural resources. It does not want to open factories or invest into manufacturing goods here."

But still, for millions across this impoverished region, China is a lifeline.

Whether they like it or not, people rely on Chinese goods here, and where China's economic influence leads, its political might will follow.

Just one more move on the oil chess board in that region.

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