(C) MY WAY OR NO WAY: UZBEKISTAN GETS DEFENSIVE ON

C O N F I D E N T I A L SECTION 01 OF 03 TASHKENT 001853 SIPDIS SIPDIS DEPT FOR OES/ETC, OES/PCI, OES/STC, SCA/CEN, EUR/ACE, DOE FOR NNSA, EPA FOR OFFICE OF INTERNATIONAL AFFAIRS E.O. 12958: DECL: 10/25/2017 TAGS: KENV ETRD ENRG PREL TBIO ZK UZ SUBJECT: (C) MY WAY OR NO WAY: UZBEKISTAN GETS DEFENSIVE ON TRANSBOUNDARY WATERS REF: TASHKENT 1608 (NOTAL) Classified By: CLASSIFIED BY ECON OFF B. OLSEN FOR REASONS 1.4 (B, D). ¶1. (SBU) Summary: President Karimov,s speech at the Shanghai Cooperation Organization (SCO) Summit in Bishkek on August 16 was the clearest and most official statement of Uzbekistan,s position on the use of transboundary waters of Central Asia. In an effort to legally justify its position, on September 4 Uzbekistan surprisingly acceded to two United Nations conventions governing the use of international watercourses. Uzbekistan is citing the conventions to defend the status-quo regime on water sharing, a regime that favors the interests of Uzbekistan over those of upstream countries. Meanwhile, Tajikistan and Kyrgyzstan reportedly are coordinating a strong push both domestically and internationally to attract foreign direct investment to build hydropower infrastructure and make the current water sharing regime more equitable. End summary. ¶2. (SBU) The information sources for this cable include official statements and reliable press reports. The regional ESTH LES is based in Tashkent, travels throughout the region and engages in extensive discussions with environmental experts. The cable has been reviewed by Embassy Bishkek and Embassy Dushanbe. ¶3. (SBU) At the SCO,s annual summit in 2007, energy cooperation was added as a priority to the agenda, demonstrating increased interest among its members, especially energy-hungry China and Russia. While China and Russia are interested in increasing natural gas imports, the general new energy focus, including hydroelectric power, has brought to the foreground the long-standing transboundary water issues among Central Asian countries. ¶4. (SBU) Given the importance of agriculture, namely cotton, to Uzbekistan,s economy, Uzbekistan does not want to alter the current water-sharing regime that allows water to flow freely downstream in the spring and summer. Tajikistan and Kyrgyzstan thus far have failed to equitably trade water for power or receive compensation for their seasonal energy losses. Both possess enormous hydropower generating potential, but are unable to meet domestic electricity demand ;in the winter. Energy imports from Uzbekistan, Kazakhstan and Turkmenistan meet some needs during the cold months, but Tajikistan and Kyrgyzstan have not been able to negotiate a consistent supply of energy at fair prices with Uzbekistan. Karimov,s Watery Offense -------------- ¶5. (SBU) At the summit, President Karimov repeatedly quoted passages from two United Nations (UN) conventions to defend his position in support of the status quo. (Note: Soon after the summit the Uzbeks acceded to the two water conventions (on September 4). End note.) He cited the 1997 United Nations Convention on the Law of Non-navigational Uses of International Watercourses and the 1992 UN Economic Commission for Europe,s Convention on the Protection and Use of Tran-boundary Watercourses and International Lakes. At the 2007 UN General Assembly, UNGA, in September, Foreign Minister Norov made similar points, devoting the first half of his speech to transboundary water issues and the rights of downstream countries. ¶6. (SBU) Karimov cited the conventions, saying that measures should be taken by upstream countries to mitigate the consequences or compensate the affected countries. Karimov noted technical feasibility studies for hydropower projects in Kyrgyzstan and Tajikistan should be examined by third parties to protect downstream users and the environment. If this is not done, he warned, the planned projects would negatively affect the lives of tens of million people, worsen the water supply and accelerate an ecological catastrophe of the shrinking Aral Sea. TASHKENT 00001853 002 OF 003 ¶7. (C) Comment: Karimov's statement is self-serving. With more reservoirs to hold water, water usage would become more efficient as water would be released when needed. The living standard of the Tajiks and Kyrgyz would improve as they would have better access to electricity and heating. More water released in the winter to create electricity would result in more water reaching the Aral Sea and less being siphoned off for crops, as is currently done, thus improving the water supply of those living near the Aral Sea. Uzbekistan's policies (both Soviet and post-Soviet) account for the majority of man-made adverse effects on the Aral Sea. Recent expert commentary suggests there is no hope of restoring the "southern" (Uzbek) Aral Sea to its 1960's level, but rather that the best that can be hoped for is to stabilize the current annual losses and keep the sea at its existing, vastly reduced level. Even this, an American scientist remarked, is not possible without dramatic improvements in Uzbek irrigation and water management techniques, practices which are far from being enacted. End comment. ¶8. (C) Karimov further defended his argument by citing relevant rules and procedures of the World Bank and the Asian Development Bank, which require prior consent of all concerned countries before international water projects are approved. (Note: In September, the Head of the World Bank told the DCM the GOU had warned the Bank to proceed very cautiously on offering any support for major dam projects (reftel). End note) The Upstream Defense -------------- ¶9. (SBU) The Tajik Government aims to finish its Soviet-era hydropower projects and build new ones. In 2004, Russian Aluminum (RUSAL),Russia,s giant aluminum producer signed a deal to finish the Rogun power station on the Vakhsh River, a major tributary of the Amu Darya. Later that year, the Russian company United Energy Systems started construction of Sangtuda-1, and Iran started construction of the Sangtuda-2 power station, both on the Vakhsh River. In August 2007, Tajikistan and Afghanistan agreed to jointly construct the Dashtijum hydropower plant on the Pyandj River. It should be noted that the Rogun project has not progressed since 2004, Sangtuda 2 is behind schedule, and only Sangtuda 1 is on schedule. So while there is a swirl of activity on hydropower projects in Tajikistan, there is not uniform progress. Similarly, the Kyrgyz Parliament voted in June 2007 to allow private investment in the unfinished Kambar-Ata 1 and 2 hydropower projects. Kyrgyzstan plans to establish a joint venture with Kazakhstan and Russia to build these hydropower stations, estimated to cost USD 2.5 billion. ¶10. (SBU) Upstream hydropower projects aim not only to make Kyrgyzstan and Tajikistan energy exporters, but also to secure greater influence in regional politics. Once these power stations are operational, Tajikistan and Kyrgyzstan should be able to better mitigate winter energy shortages, meet domestic energy demands and export excess electricity to Afghanistan, Pakistan, India and China. These stations will allow for the long-term control and manipulation of the flows of the Amu Darya and Syr Darya by upstream countries. This is exactly what Uzbekistan wants to prevent. Comment -------------- ¶11. (C) Uzbekistan can be expected to take further steps to hinder the implementation upstream of hydro energy infrastructure. Media reports and comments from Tajik Government officials in recent months suggest that Tajikistan,s move to terminate a deal with Russian RUSAL over the height and type of Rogun dam was caused by Uzbek interference. Uzbekistan's meddling is rumored to be the cause of the Chinese dropping finance for the construction of a Tajik hydropower plant on the Zarafshan River. (Note: While Uzbek interference may be a factor, but Tajik Government failure to improve the investment climate in TASHKENT 00001853 003 OF 003 Tajikistan has certainly also hindered Rogun and other projects. End note). ¶12. (C) The Uzbeks' use of international law in public discourse demonstrates their increased concern over Tajik and Kyrgyz efforts to harness water energy, a god-given resource in Karimov's view. In its typical balancing game, Uzbekistan has taken the issue to an international forum. The Uzbeks feel the pinch by the Tajiks and Kyrgyz and are trying to use international conventions to defend the current water regime. Uzbekistan historically has been reticent to join international and regional organizations. This new move may provide a partial legal basis for Uzbekistan to maintain the status quo. However, if Tajikistan and Kyrgyzstan do not have access to reliable energy supplies, or if water cost-sharing agreements are insufficient and/or ignored by neighbors, then both countries could well argue that they are obliged to produce energy domestically through water resources. Transboundary water issues will continue to plague this region until the parties develop enough trust or see enough mutual interest to sit down together and negotiate a regional water management scheme--something that still appears to be far down the line. NORLAND