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Hearing of the Asia, the Pacific and the Global Environment Subcommittee of the House Foreign Affairs Committee - Central Asia: An Overview

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Location: Washington, DC

DEL. FALEOMAVAEGA: (Sounds gavel.) The House Foreign Affairs Subcommittee on Asia, the Pacific and the Global Environment will now come to order.

I note that regretfully my colleague and good friend, our ranking member of our subcommittee, the gentleman from Illinois, is unable to join us. However, we will proceed and I will begin with my opening statement, as I'm sure other members will be coming in and out over the course of this proceeding.

Central Asia is emerging as a source of oil and gas for world markets. According to the U.S. Department of Energy, the region's natural gas reserves are comparable to those of the United States, and its oil reserves are comparable to Qatar on the low end and Libya on the high end, in between 10 to 42 billion barrels of oil.

The Republic of Kazakhstan possesses the region's largest oil reserves at 9 to 40 billion barrels and exports about 1.3 million barrels per day. While the administration has suggested that it considered Central Asia to be significant to the diversification of suppliers of energy to Europe or to the United States, the position of special adviser for Caspian energy diplomacy was abolished in 2004 and the State Department has yet to appoint a coordinator for international energy affairs, which the Energy Independence and Security Act of 2007 calls for the administration to do.

2006: When Russia temporarily cut off gas to Ukraine, which highlighted the European Union's dependence on Russian oil and gas, administration encouraged Central Asian countries to transport their energy exports to Europe through pipelines that crossed the Caspian Sea, thereby bypassing Russia and Iranian territory. However, it is my understanding that the administration has been unsuccessful in this effort, too, and that Kazakhstan and Turkmenistan have not yet agreed to build a trans-Caspian pipeline.

On the human rights front, Freedom House gave Turkmenistan and Uzbekistan its lowest possible ratings on political rights and civil liberties. Some have suggested that Kyrgyzstan may be most likely to make a peaceful transition to a Western-oriented political system. An agreement was reached for Kazakhstan to chair the Organization for Security and Cooperation in Europe in the year 2010.

Regarding U.S. security interests in the region, in 2001 Kyrgyzstan provided basing for U.S. and coalition forces. Kazakhstan and Turkmenistan provided overflight and other support. Tajikistan permitted use of its airport, and Uzbekistan provided a base for U.S. operations.

However, three years ago at a meeting at the Shanghai Cooperation Organization, a regional security grouping consisting of Russia, China and all the Central Asian states except Turkmenistan, called for coalition-member-supporting operations in Afghanistan to decide on the deadline for their military contingents' presence in those countries. Despite signing this declaration, none of the Central Asian leaders have called for the immediate closure of U.S. and other coalition bases.

U.S. security interests also include the elimination of nuclear weapons in Kazakhstan. From 1949 to 1991, Soviet Union used Kazakhstan as its nuclear testing ground, exploding more than 500 nuclear devices, or bombs, exposing more than 1.5 million Kazakhs to nuclear radiation.

I want to note also as a comment -- side comment, at the height of the nuclear arms race during the Cold War in 1954, my own government, the United States, exploded the first hydrogen bomb, which was known then as the Bravo shot, the Marshall Islands in the Pacific.

It's a sad commentary of the nuclear arms race, and despite the fact that U.S. military officials knew the winds had shifted, three hours before the hydrogen bomb explosion they went ahead and detonated a hydrogen bomb, which was a 15-megaton explosion.

And for those of you who may not be familiar with this, it takes an atom bomb to trigger the explosion of the hydrogen bomb. This 15- megaton explosion by my government in 1954 was 1,000 times more powerful than the atom bombs that we dropped in Hiroshima and Nagasaki in Japan.

As a result of this careless act on the part of the U.S. government, several hundred Marshallese men, women and children were severely exposed to nuclear radiation, let alone several hundred U.S. soldiers and sailors were also severely exposed to nuclear radiation. And to date, the U.S. government still has not fully addressed the problems of giving proper medical treatment of the Marshallese men, women and children who were exposed.

It's my intention of this subcommittee to pursue this matter more on a government-to-government relationship between the Republic of the Marshall Islands and the U.S. government in terms of what should be done to give assistance on this terrible thing that we did during the height of the nuclear arms race.

Not to be undone, the Soviet Union, right afterwards, also exploded not a 15-megaton hydrogen bomb but a 50 -- a 50-megaton hydrogen bomb that was exploded in Kazakhstan. It was 3,000 times more powerful than the U.S. hydrogen bomb that was exploded.

As a result of this, 1.5 million Kazakhs were severely exposed to nuclear radiation as a result of the Soviet Union's nuclear testing program at that time -- another sad commentary about the nuclear arms race and nuclear explosions. And to this date, nothing has ever been brought to the -- give any assistance to the government of Kazakhstan on this that was done by the former Soviet Union.

When the Soviet Union collapsed in 1991, Kazakhstan inherited this mess -- mess of nuclear explosions and what was done to the people in Kazakhstan. I might also note another side note: the French government also conducted a nuclear testing program, also in the South Pacific -- 220 nuclear explosions in the atmosphere, on the surface, beneath the surface, and exposed well over 10,000 Tahitians and French Polynesian as a result of this nuclear testing -- terrible nuclear testing program that took place in the South Pacific.

I said earlier, when the Soviet Union collapsed in 1991, Kazakhstan inherited this terrible mess, and Kazakhstan could have become the first and only Muslim nuclear superpower. It retained enough highly enriched uranium to produce 20 nuclear bombs. I commend Kazakhstan's president for voluntarily dismantling the world's fourth largest nuclear arsenal, shutting down the world's second largest nuclear test site.

What he did for all of us can never be underestimated and should never be forgotten. Certainly a credit also to Senator Sam Nunn and Senator Lugar for their participation and initiative in doing the dismantling program, where our government also participated in dismantling the nuclear weapons that were left by the former Soviet Union in Kazakhstan.

Today Assistant Secretary Richard Boucher of the U.S. Department of State's Bureau of South and Central Asian affairs is with us. Hopefully we can address recent developments in Central Asia, including two incidents relating to Kyrgyzstan which have led to increased anti-American sentiment in that country.

The first one's a collision between an American military aircraft and Kyrgyz civilian jet liner, and the second was the murder of Mr. Alexander Ivanov, a Kyrgyz citizen working on the base, by an American soldier in 2006. Both incidents were brought to my attention by Kyrgyzstan's ambassador to the United States, who has submitted the statement which I am including for the record.

I promised her that I would also bring these matters to your attention, Mr. Secretary. I seek your input and comments.

For the record, I'm also including the statement of Ms. Marina Ivanova, widow of Alexander Ivanov. On the human rights situation in Central Asia, the subcommittee will also include a statement submitted by Freedom House under Mr. Jeffrey -- I'll get his name later for the record.

Before providing the subcommittee with your statement, Mr. Secretary, I just want to make this as a introduction.

Ambassador or Secretary Boucher was sworn in as assistant secretary of State for South and Central Asian affairs two years ago. In the course of his career, Ambassador Boucher served as Department of State spokesman or chief spokesman under six secretaries of State and has served as chief of missions twice overseas.

Ambassador Boucher served as chief spokesman under Secretary of State Madeleine Albright, Secretary of State Colin Powell, Secretary of State Condoleezza Rice, Secretary of State James Baker, Secretary of State Eagleburger and Secretary of State Christopher. That's quite a list there.

Ambassador Boucher also earned career focus primarily in economic affairs in China and Europe. He served as ambassador of Cyprus for three years, from '96 to '99; served also as consul general in Hong Kong; also was involved with the Asia Pacific Economic Cooperation, commonly known today as APEC; and as a career Foreign Service officer since 1977. Ambassador Boucher also served tours in Taiwan; Guangzhou in China; Shanghai. A native son of Maryland, obtained his undergraduate degree from Tufts University and did graduate work in economics at George Washington University, and fluent in French and Chinese. What a combination.

Mr. Secretary, we welcome you, and I really, really appreciate your taking the time to appear before the subcommittee and to give us a little report of where we are as part of this oversight hearing in Central Asia.

I don't think the average American knows anything about Central Asia, yet it's my humble opinion that Central Asia, in the years to come, will definitely be one of the most important regions to look at and to -- certainly for our government to be actively involved, simply because of the issues involving the energy resources that countries of the world have a need for.

And I have no doubt in my mind, Mr. Secretary, Central Asia will definitely become the very, very important region in the world in the years to come.

Mr. Secretary, please proceed. And by the way, there's no five- minute limit, because it'll be you and me. Hopefully maybe some of my colleagues will join us. Everybody is so uptight with all the things happening now in the past weekend, but be that as it may, please proceed.

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DEL. FALEOMAVAEGA: Thank you, Mr. Secretary. I appreciate very much your comments and your statement. We will proceed now with a couple of questions that I have.

Sometimes I get so confused myself -- we've got Central Asia, we've got South Asia; where's West Asia?

MR. BOUCHER: (Laughs.)

DEL. FALEOMAVAEGA: Where's East Asia? And then there's Southeast Asia, there's Northeast Asia -- what the heck is going on here? We put labels and geographical terms and yet totally unassociated in any way or form.

You mentioned earlier about Secretary Rice suggesting that the linkage be established between Central Asia and South Asia. Why not link it also with West Asia, like the Ukraine and Georgia and those other countries that are just right along the border as well? Is it because they're less democratic than those in Central Asia, or because we have a higher interest in Central Asia than we do among the countries like Ukraine, Georgia and the others that seems to have Russian influence?

Or are we going back again to the Cold War period, seemingly that there seems to be maneuverings in this region and the part of Russia and what we're trying to do in extending our sense of influence? Do you perceive the Shanghai cooperation agreement as somewhat like a NATO counterpart in terms of what's happening now in the trend? Let's ask -- let's raise that issue first.

The perception, at least in my own layman's terms, is that it seems that because NATO -- by the way, we organized NATO because of the former Soviet Union and the power play between the two superpowers. That no longer exists, supposedly. But we continue expanding and organizing NATO, for what? There's no more Soviet Union.

Can you help us with that?

MR. BOUCHER: Sir, there are a lot of good questions there.

I guess any time we try to organize ourselves bureaucratically we have to divide the world up into chunks that we can deal with. These countries have been, if you look over the last 15 years of their independence, which is not a long time, but the five stands, as they're called, of Central Asia have been part of the European bureau at the State Department, they've been part of the separate sort of Russia, former Soviet Union configurations and now they're part of a region that includes South Asia and Central Asia together.

The reason that Secretary Rice wanted to do this is because she thought that's where the strategic opportunity lay. In no way are we trying to take away from their existing ties and infrastructure to Russia; that's an important opportunity. They're building new ties and markets for energy and trade and other relationships with China; that's an important opportunity for them.

We continue to work very hard, along with Europe, to develop their ties to Europe. Indeed, most of the countries, most of the heads of state were just in Bucharest last week at the NATO meeting, participating in the NATO events there along with other countries in this broader area that NATO is trying to develop ties with, and several of them have Partnership for Peace programs and other programs with NATO that helps them develop their forces, develop their capabilities in natural disaster relief, for example, and other areas with the assistance of NATO.

And I think it's important that people keep that association with Europe, keep an association with the European Union. The European Union is very active in this region, we work closely with them. They keep an association with the Organization for Security and Cooperation in Europe, which can be an important source of advice on democratization and laws and constitutional change as well as value support for professional security operations, better respect for human rights and other things, as well as economic opportunity.

So there's a lot of these ties to Europe that are very important to us we work very hard to nurture. But for us, organizationally, the new opportunity is South Asia. The historic opportunity is that Afghanistan, for the last 150, 200 years, has been a block between south and Central Asia, and it's now an open place -- a hub, a potential conduit for trade, for ideas, for energy, for people.

DEL. FALEOMAVAEGA: Mr. Secretary, I don't mean to interrupt, but the opportunities right now in Afghanistan, we are really in the most very, very serious situation. There's a NATO presence there because of the Taliban, some 21(,000) to 30,000 U.S. forces are there in Afghanistan, and of course it started with the whole fact that -- with the fact that the 19 terrorists who attacked our country on September 11th, which initiated a whole effort to go to Afghanistan, supposedly to look at -- to go after Osama bin Laden, which five, six years later we still have not found Osama bin Laden.

My point here is that you're suggesting that Afghanistan is a tremendous potential for advancement, but it seems to me that we've got some very, very serious problems there in Afghanistan. I don't see where the advancement is, and I note with interest that Afghanistan borders Iran, Iran borders Turkmenistan, and yet somehow we seem to want to isolate, as if to pretend that Iran does not exist.

One of the ironies that I've always also wondered in the whole realm of putting the finger on Iran because of its nuclear testing or nuclear reactors that might be transformed to a nuclear weaponry system, and then our European allies trade with Iran.

There seems to be a contradiction here, Mr. Secretary, and I'd like for you -- how is it that on the one hand we're going after Iran in the worst form -- isolating it, putting all kinds of sanctions because of its proposed nuclear reactor that Iran has a felt need for -- and yet find out that many of our European allies are trading with Iran?

MR. BOUCHER: Let me start with the Afghanistan portion of that if I can, because that's directly in my league.

DEL. FALEOMAVAEGA: Please.

MR. BOUCHER: There are enormous problems in Afghanistan. There are enormous problems in Afghanistan that affect Central Asia. These people are worried about some of the terrorism effects that can come their way. Certainly, they're worried about the drug trafficking that comes out of Afghanistan and goes in their direction. And that's why a lot of our --

DEL. FALEOMAVAEGA: And the growing of poppy that never seems to go away.

MR. BOUCHER: And we try to deal with that in Afghanistan but also help these countries with drug control and border control.

But there are also opportunities, opportunities for trucks and trade symbolized by that bridge that Secretary Gutierrez and I were at the opening of last August, opportunities to bring electricity down. There are contracts. There are lines being built. These countries will start supplying some of the energy that Afghanistan needs. A couple years beyond that, they'll start supplying energy through Afghanistan down to Pakistan, which is desperately in need of energy, and eventually we hope down into India. So those are opportunities that are emerging. And even as we deal with all the challenges and difficulties of Afghanistan, we have to develop these opportunities as well.

As for Iran, I don't deal directly with Iran. I deal with the effects of Iran on Afghanistan where we see a variety of behaviors -- sometimes support for the government, sometimes culture and commerce, sometimes supply of weapons to the Taliban, sometimes efforts to suborn the political process. Iran is very difficult to deal with in this region, and we do look at Iran's behavior overall, whether it's on the nuclear issue, on support for terrorism groups or undermining what we think is the -- sometimes undermining the government in Afghanistan.

And we have to deal with that with partners. I -- just on the issue of Europe and trading with Iran, I think if you look back at how we've dealt with the issue, the problems that Iran has created over the last couple years, particularly the nuclear problem, it's been a matter of extensive discussion and coordination with Europeans and other allies. It's been a matter of U.N. resolutions where everybody got together and agreed. So we've been working with those people as well, and they've been supporting the overall effort.

DEL. FALEOMAVAEGA: May have alluded to it earlier, but I'll pursue this question again, Mr. Secretary.

I have said that in my layman's opinion that there is tremendous potential of the Shanghai Cooperation Agreement that could also become a NATO-type organization as a counterpart to NATO and raises another question that I might have and wanted to ask your opinion: Why do we want to build a missile defense system in Poland and Czechoslovakia? Who are the enemies that we have there that we're building this missile system for?

Now, I'm told, at least if the media reports are accurate, this thing is pointed against Iran, and of course the Russians are saying no, it's pointing at us. And aren't we creating another arms buildup in a similar situation of a cold war potential for doing this? I mean, who are we really pointing these missiles at in this plan, grand scheme of things that we want to build a missile defense system in these two countries that -- I just don't see where the enemy is. Maybe -- please help me out.

MR. BOUCHER: Sir, when I was spokesman, and you knew me before in that role, I did answer questions about anything in the whole world, but at this point the question of missile defense in Europe is handled by my colleagues who do Europe and NATO. And so I am sure I cannot give you a complete answer.

Let me just say that the system, as I understand it, is of such size and capability that it's not going to protect against the kind of arsenal that Russia might have, for example. It is to protect against rogue, errant or -- rogue states or errant missiles or onesies, twosies basically, maybe small numbers, and that that's the kind of fear that we have given the proliferation of technologies and capabilities in the world that you have to be able to protect yourself against somebody that might not have the kind of nuclear deterrents that we've had in the Cold War days but that might have some kind of small capability that it could be used at any moment for any reason.

The Shanghai Cooperation Organization question -- let me make sure I answer it this time; I forgot it last time. You know, the organization was founded with the goal of improving border security, improving border exchanges, promoting cooperation against terrorism in the region. I think to the extent the organization has done those things, it's contributed to better security and stability for the countries involved.

It's wandered off in various directions during the course of its political communiques. You cited the one from three years ago. There were some aspects of after that that made it seem like maybe it was a place for big countries to push little countries around. I would say it's probably stabilized again back to the basics of border security, cross-border cooperation, customs border procedures, efforts -- common efforts against terrorism. And to that extent, you know, when it does that, we think it makes a contribution to the region.

It's not becoming, as we see it, a sort of military alliance. It's certainly not an organization that's marshalling capabilities, commanding capabilities, instructing countries what to do and how to do it. And whenever we see it heading in that direction -- as I said, big countries telling little countries what to do -- we tend to stand up for the little countries and say it's your right to decide.

Last year they had their meeting in Kyrgyzstan in Bishkek right next to the Manas Air Base. The Kyrgyz government made very clear that was a bilateral issue -- issue between them and us, them and NATO. It wasn't a matter for discussion and it didn't become a matter for discussion for Shanghai Cooperation.

So I think, as I said, I think we see our cooperation as being separate from Shanghai and the Shanghai Cooperation Organization doesn't really interfere very much at this point.

DEL. FALEOMAVAEGA: So in your best opinion, the Shanghai Cooperation really does not trend towards like a NATO military alliance, more cooperative on economics.

MR. BOUCHER: Not the Warsaw Pact, yeah.

DEL. FALEOMAVAEGA: My understanding, the Russians look at this as a potential military alliance, serve also as a counter to our NATO military alliance, so, of course, the Chinese look at it as an economic cooperative effort. And it's my understanding also that India and Iran stand as observers to the Shanghai Cooperation. They might also be members one day?

MR. BOUCHER: There's some reports that Iran has already asked for membership. I'm not sure what the organization will do for that.

DEL. FALEOMAVAEGA: You think it's a positive thing that Iran become a member of the Shanghai Cooperation?

MR. BOUCHER: Not particularly. I mean, I think our -- my view would be that there needs to be cooperation in the region, in the region with the neighbors, but the emphasis -- our emphasis is always on the countries of the region. And we work with the countries of the region to build their capabilities to control their borders, to build their capabilities to control terrorism, to build their capabilities to control narcotics and drugs, and that's the way we'd like to see other countries working --

DEL. FALEOMAVAEGA: So suppose the Central Asian countries say, "Iran, come on over, join us, this is for economic cooperation"? Do you see any problem with that?

MR. BOUCHER: It depends what form that cooperation takes. I think we understand countries of the region are going to have trade with Iran.

DEL. FALEOMAVAEGA: How different is that from the fact that European countries also continue to this day trading with Iran?

MR. BOUCHER: It's frankly probably --

DEL. FALEOMAVAEGA: Our allies.

MR. BOUCHER: It's -- the trade that countries in Central Asia have with Iran, I guess, probably even lower level and sort of more -- what you see when you're in the region is more consumer goods and things like that. It's just sort of an ordinary relationship with a neighbor in many cases. Where we get disturbed and troubled and where we work with countries is to combat Iranian influence when they're trying to influence governments or political parties or modify sort of religious practices or supply weapons to the Taliban. That sort of behavior is not acceptable and we're going to work with countries of the region to stop it.

DEL. FALEOMAVAEGA: Human trafficking: What is the status of human trafficking into Central Asia?

MR. BOUCHER: There are a number of serious problems. It's an issue on our agenda that we work with every single country in the region. We have I think at least raised the issue and made it a matter of concern to the countries of the region, seen some progress. Even in Uzbekistan, we recently saw them pass a law against human trafficking. Obviously, passing a law is a long way from full implementation, but it's a start. So it's an issue that we do raise and that we do focus on in our relationships with the countries of the region.

DEL. FALEOMAVAEGA: How effective has been the U.S. engagement with Central Asia states to encourage them to democratize and respect human rights? You think that sometimes when we put earmarks -- congressional earmarks or congressional statements in our appropriations process, is that a help that the Congress even becomes an added extension of our foreign policy system rather than having it performed by the secretary of State?

MR. BOUCHER: Mr. Chairman, as I mentioned in relation to your trips to the region and trips that other members of Congress have made, whether it's on the Nunn-Lugar programs or the human rights issues, I think congressional involvement in this region is a very important part of U.S. policy. And certainly, every member of Congress that's traveled to this region, yourself most prominent among them, has raised issues of human rights and helped us push a human rights agenda as part of our overall relationship. So I, first of all, we thank you for congressional involvement.

We have had, I think, generally a positive influence on the human rights in the region. We've seen I think continuing progress. Some of it is inch by inch. Sometimes we see I wouldn't say an about face but backwards steps, backpedaling involved in human rights. And so you get, you know, last year in Kazakhstan some constitutional changes that basically probably move the system forward but accompanied by a series of regulations and laws that meant that they ended up having an election where only one party got into parliament. That clearly is not, practically speaking, a step forward for human rights.

So this year, we're working with them and encouraging them to work with the OSCE to pass election laws that meet fully the standards of the OSCE. Kyrgyzstan ended up with a flawed referendum in a very deficient election last year as well. So it's not all smooth sailing. It's not always forward movement. But I think generally we have managed to keep the issue of human rights and the way people treat their own people on the agenda for these countries. We've managed to promote human rights in many areas where it might have seemed difficult and in individual cases (received ?) some progress.

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DEL. FALEOMAVAEGA: Just to follow up on your question because I have a very important -- it's my understanding -- how many countries make up the Organization of Security and Cooperation in Europe?

MR. BOUCHER: Fifty-four or so, maybe one or two more.

DEL. FALEOMAVAEGA: Fifty-four. Because my understanding is that we were the only country that did not support Kazakhstan -- because it was next in line to become chairman of this organization. All the other countries endorsed Kazakhstan's becoming the chair -- to chair this organization except us. Is it -- does this suggest that we have a different standard of how we look at countries to become -- to take up the chairmanship of this organization than the rest of the members of this organization?

MR. BOUCHER: We've been working this for about two years, and yes, indeed, there was a -- we weren't alone. There was a very small group of countries that had serious reservations.

DEL. FALEOMAVAEGA: Like who, our allies in Europe?

MR. BOUCHER: Yes, some of our allies in Europe. Our view was always that we would love for Kazakhstan to be chairman, but we would love for Kazakhstan to meet the high standards of the organization and then to become chair.

DEL. FALEOMAVAEGA: How did Kazakhstan become a member of this European organization? (Laughs.)

MR. BOUCHER: How does Kazakhstan become a member of this? It was basically NATO's decision and Europe's decision after the Soviet Union fell apart that the countries that were formerly part of the Soviet Union should become involved in these different organizations. The Soviet Union was in the OSCE, and when the Soviet Union fell apart, all the different countries that had been part of the Soviet Union remained in the OSCE as part of their -- as independent states.

DEL. FALEOMAVAEGA: I'm sorry. I didn't mean to -- I want to follow up later on this.

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DEL. FALEOMAVAEGA: I thank the gentleman, my good friend from Texas.

I have another sense of curiosity, Mr. Ambassador. We have Central Europe. Do we have Southern Europe? Do we have Eastern Europe? Or do we have -- how are we dividing Europe in that regard?

MR. BOUCHER: Our -- organizationally our European bureau is a big bureau. It had all 54 countries of the OSCE in it.

DEL. FALEOMAVAEGA: Make up Europe? Fifty-four countries make up Europe?

MR. BOUCHER: And now five have come out, so it must have 49 left, although I haven't counted them recently. I think it actually has 50 now with Kosovo.

DEL. FALEOMAVAEGA: Can you elaborate a little further exactly what the Organization for Security and Cooperation in Europe does?

MR. BOUCHER: It -- this goes back to Helsinki Accords during the days of the Soviet Union, and it was established as an organization --

DEL. FALEOMAVAEGA: As a counterpart to the Soviet Union?

MR. BOUCHER: No. In -- Soviet Union was part of this, remember, Chairman.

DEL. FALEOMAVAEGA: Okay.

MR. BOUCHER: President Ford signed the agreement in 1972 in Helsinki, and the Soviet Union was part of this. And he was very severely criticized -- (laughs) -- at the time, I should say, in some quarters. But the idea was that we would work between the countries in NATO, the countries in the Warsaw Pact, the countries of Europe and of Eastern Europe and the Soviet Union, would work together in three baskets: in the area of human rights, the area of security, the areas of economics.

DEL. FALEOMAVAEGA: Security collectively, security regionally, security worldwide, security -- what --

MR. BOUCHER: Security in those days was mostly questions of transparency and openness and visits to bases and looks at equipment and things like that, inspections and things like that. We had -- actually, I worked on this 20 years ago; I forgot half of it. But it was the idea of collective security and transparency, that that would help build security for everybody.

But I have to say, in the days of the Soviet Union, the Soviets were always pushing it in the direction of security and economics and trying to stay away from the human rights stuff, and the West and the United States pushed very hard on the human rights side. So most of our negotiations on texts or agreements or conferences ended up boiling down to issues of refuseniks, issues of letting people emigrate, issues of letting people out of prisons.

Since 1990, it has taken on, I'd say, a more, in some ways, positive role in that they have experts and advisers who can go to countries, who can help them on the security side say we're professionalizing the police and the border forces. On the issues of economics, they can help people with economic reforms in creating markets in ways that we also support with our aid programs. And in the issue of human rights, they have constitutional experts, election experts, people who can work with political parties in a very nonpartisan way, people who can work with the media on media training. And so they run a lot of programs, and what we want is for countries that participate to participate in all aspects of this not to pick and choose but to understand that all these pieces fit together and build a reformed and modernizing society. And that's what people want to aspire to.

DEL. FALEOMAVAEGA: It's somewhat misleading, the word Europe in this organization, because now you have Central Asian countries as well as South Asian countries that are members of this Organization for Security and Cooperation. Am I correct on this?

MR. BOUCHER: Well, it takes a broader idea of Europe, but yes.

DEL. FALEOMAVAEGA: That's what I mean. It's --

MR. BOUCHER: President Nazarbayev of Kazakhstan gave -- when he gave his sort of state of the nation speech earlier this year, one of the key elements was he talked about the path to Europe for Kazakhstan. He wants Kazakhstan to become more and more a European nation -- European not in geography. He's not going to put an anchor on it and haul it a couple thousand miles, but he wants to adopt laws and institutions and practices and standards and values that reflect the laws and institutions and values that are practiced in Europe and the United States, for that matter.

DEL. FALEOMAVAEGA: Do you think in the coming years just as a matter of sheer geographic terms, we have the European Union comprised of all these nations that make up the EU, do you think potentially this Central Asia, Russia and China could also establish a similar type of union in terms of an economic regional organization similar to the European Union?

MR. BOUCHER: I think if something like that happens, it's a pretty long way off. Based on what I know from the countries of the region, they all want to have free trade agreements, more open trade, and routes with each other. We work a lot on trade facilitation issues. When you look at the bridge, you know, the bridge and the highways are coming into place, the trucking regulations, the route inspection requirements, the border posts, the bribery and corruption, just a whole lot of things that still hold back the trade.

So they want to -- they're interested in opening up the trade, and we're now, frankly, working on that with them as well.

But in the end, I don't think they want to get tied into trading with only one partner, one set of partners. The European Union just sort of banded together to create a solid trading area, a single market. I think these people are all looking for multiple markets and multiple opportunities, and I think they want to open up the India market as much as they want to open up the China market for themselves.

DEL. FALEOMAVAEGA: In terms of dollar value, how much presence economically do we have as a country towards Kazakhstan, Kazakhstan being the most progressive and the most advanced as far as economics and export right now in Central Asia?

MR. BOUCHER: We've got an enormous investment in the oil and gas industry, something over $10 billion --

DEL. FALEOMAVAEGA: Just in Kazakhstan alone.

MR. BOUCHER: Just in Kazakhstan. That dwarfs the investment in I think any other country in the region that we have.

DEL. FALEOMAVAEGA: Isn't it also true that Turkmenistan is one of the biggest natural gas reserves in the world?

MR. BOUCHER: It has a lot of potential there. It's been held back by the practices and the way they've operated over the last couple years. The new government has indicated they want to put oil and gas on a market basis, a more modern basis.

One of the things that was always in doubt about Turkmenistan was how much reserves they really had, how much export -- how much gas they would have available for export. They're going through standard practice in the industry, but they hadn't done it before, a gas audit to identify exactly what they have in the way of reserves and that'll give commercial enterprises a better picture of what they will have developed --

DEL. FALEOMAVAEGA: Russia alone being one of the biggest exporters of energy resources in the world, do you foresee a potential of having a similar OPEC organization among the Central Asian countries with Russia, Iran included, even though Iran is currently a member of OPEC? Do you see that potentially this region could become a counterpart to OPEC?

MR. BOUCHER: I think all countries that are oil and gas exporters in this way want to kind of follow along with OPEC. I really haven't talked to any of the individual nations involved about their attitudes towards it, but they do benefit from any pressure to drive prices up. It seems probably at present there's enough pressure to drive prices up anyway.

What they do resist is the monopolization of their resources because of the Soviet Union's infrastructure -- the pipelines, the gas pipelines, the oil and gas export routes and pipelines have all gone through Russia. And what they want to do is to develop other opportunities.

For a long time Turkmenistan was paid a below-market price for its gas. They weren't making what you'd make if you export it to a normal economy and they've been able to parlay the prospect that they might export to other places, indicating a -- (word inaudible) -- price for their gas. And the people of Turkmenistan benefit from that, and they, at least the new government, say they intend to use that for things like scholarships and national development.

So I think what they want to do is have multiple outlets, multiple opportunities, and get a decent price from all the players, including Russia.

DEL. FALEOMAVAEGA: You know now with $110 a barrel, $4 dollars a gallon in our country and what amazes me, I'm not an economist or mathematician, but I think I can add two plus two equals four. How is it possible that if major oil corporations in our country are making just billions and billions of dollars say, "Oh don't blame it on us, it's the cost of oil in the world market that's causing all this rise in gas here by the American consumer," but at the same time, they're making hundreds of billions of dollar profits? Can you help me along this line here?

MR. BOUCHER: (Laughs.) I think that was the subject of a separate hearing last week.

DEL. FALEOMAVAEGA: To say that because the world market price of oil is so high, therefore that's the reason why the consumption of $4 a gallon in our country -- so that's the reason why we have to raise the prices of gas in our country and yet, at the same time they're making hundreds of billions of dollars in profits.

Do you think potentially -- do you see Russia, Central Asia, the same -- because let's face it, OPEC is controlling the world market of oil as far as -- am I wrong on this? Are they not monopolizing the cost of fuel in the world today?

MR. BOUCHER: There are a lot of different factors and a lot of different suppliers; OPEC is one of the factors, but there are a lot of other factors. You have these enormous consumer countries coming in now, as China develops its economy, as India develops its economy. They want energy too for their development.

We have other programs to try to help them with their energy needs, particularly in India where I work. But in the end there's a lot of pressure on supply, there are a lot of demand coming out in the world, and a whole bunch of other factors have driven prices up.

What I do think is that the more that we can do to help these countries diversify their routes for export, the more oil and gas that's available to these various countries, whether it's directly through pipelines or converted into electricity and exported to the south like some of the projects we're working on from Turkmenistan and Uzbekistan to go south, or whether it's other ways of exporting energy, the more energy supply there is in the world, the more that world price is pushed in a more stable -- in a stable direction.

So it's in our interest to see these countries be able to export, be able to have multiple routes of export and not be monopolized in any one place and so that they get the benefit of developing their natural resources at a market price and we get the benefit of having greater availability in the world.

DEL. FALEOMAVAEGA: It's my sincere hope that I'll have an opportunity to visit Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan. I've been to Kazakhstan twice already. The fact that all these countries started at point zero when the Soviet Union dissipated, what was the factors that made Kazakhstan, in the 15-year period to the point where its economic development and all these things have gone to such prominence, as opposed to the other countries that make up Central Asia? What are the factors that you see why Kazakhstan has been able to advance so much in its ability to build economically and that the other neighbors there in Central Asia seem to be struggling?

MR. BOUCHER: That's an interesting question, sir, because I don't think any of us would say they've done everything right, because we've certainly criticized an awful lot of things that they've done --

DEL. FALEOMAVAEGA: Well, we haven't done everything right either. (Laughs.)

MR. BOUCHER: -- human rights aspect. That's true.

They had the advantage of natural resources, an abundance of oil and gas. They had the advantage of a certain I think probably higher level industrial infrastructure than some of the other countries. But they also made some very important and key decisions. You referred to the decision to get rid of their nuclear weapons, not to go down that road. Uzbekistan made the same decision. That was a key strategic decision.

They made the decision to develop their natural resources in cooperation with capable foreign partners. Capable partners who had the technology, the business practices and the ability to develop their resources and get them a decent deal and get them the advantage of their resources.

Other countries have not been -- have not done that with their natural resources. Turkmenistan didn't develop its gas that way, may be interested now in developing it on a market basis which would be to the benefit of Turkmenistan first and foremost.

Countries that don't have the oil and gas have other potential. You know, you have the cotton that's grown in Central Asia that doesn't seem to provide as much benefit to the countries and the farmers of those countries as it should. You have huge hydropower potential in Tajikistan and Kyrgyzstan that's never been developed because there's not a regional energy market; they haven't really done what it takes economically to produce the investment that they could get in hydropower.

Let's face it, there are place in the world like Quebec or Switzerland, or now Nepal is emerging, where hydropower, the huge investment it takes to build dams, keeps paying off year after year after year after year. In some ways it's better than oil; it keeps flowing.

So I think having made the right economic choices as well as starting out with a decent endowment has made Kazakhstan do better and become more prosperous than some of these other places.

DEL. FALEOMAVAEGA: You say that by sheer geography alone that our country's been pretty good because of its isolation; you've got two massive oceans that separates us from the rest of the world. But in this neighborhood, this region you're right in the middle of some very, very hot spots. You've got the Russians up north, you've got China on the east and the current crisis and the problems in Afghanistan as well as in Iran -- pretty rough neighborhood to live with.

Does there seem to be any evidence of Russia and Chinese efforts to influence this region -- I'm referring to Central Asia now -- both economically and security-wise? Have these countries sold arms or things of that nature to Central Asian countries?

MR. BOUCHER: Yes, in many, many ways.

DEL. FALEOMAVAEGA: Are we also doing the same? You know, we happen to be the biggest exporter of military arms in the world.

MR. BOUCHER: We're not -- no, we don't sell much in the way of hardware. A couple of ships --

DEL. FALEOMAVAEGA: Is that right? Who's the number one seller of arms now?

MR. BOUCHER: I imagine it's still Russia. They all had Soviet armies and --

DEL. FALEOMAVAEGA: We're at least the top three in the world though, aren't we not?

MR. BOUCHER: In the world I'm sure, but in this region no. We don't sell a lot of military hardware.

DEL. FALEOMAVAEGA: Not yet.

MR. BOUCHER: We do a lot of joint training with countries of the region. We have good military relationships in a lot of places. We're trying to help them develop peacekeeping forces and equip soldiers to be able to go out on U.N. peacekeeping missions, but no we're not heavily involved in other ways.

The Chinese and the Russians, yeah, they do try to influence these places militarily. Some of it's good, if you can help them create their own security capabilities. Others of it probably doesn't benefit the countries that much.

I think in the end they need to turn all these pressures into opportunities. You can either sit there and be squeezed between Russia and China, or you can say hey look where I am. I've got a market of a billion people here, I've got a route to Europe, I've got a opportunity to open up trade with another billion people down in India and I'm going to make the most of it.

And that's what we're trying to help these countries do.

BREAK IN TRANSCRIPT

DEL. FALEOMAVAEGA: Okay. My understanding basically, and my discussions of this issue with some of our Chinese leaders to the extent that policy is fundamentally not to intervene or to interfere with issues that are of an internal domestic nature, so we tend to put conditions that say before we give you this, you've got to do this, this and that. And I see this all over the world, in terms of how the People's Republic of China deals with other countries.

I think it was last year China invited 40 heads of government from Africa, wined and dined them and hosted them in China for the whole purpose of trade. You want to talk about human rights or things that are important to us as part of our foreign policy, but to China they want to help in an economic form to trade with the African countries. So now there's some 800,000 Chinese doing business all over Africa in that sense of economics and not get into human rights violations.

And I point this as a matter of interest that we have every year, a State Department report that puts out countries that saying that human rights and then we put them in spectrums of Level 3, 2, 1 or 4 of the worst abusers of human rights. And I've had the opportunity of talking to some of the leaders of these countries that we put these labels of being the worst human rights abusers and they get very offended because a lot of times the State Department, whoever does the report, they don't even meet with the leaders of the countries to find out exactly if the human rights issues are being addressed seriously as it has been.

So I wanted just to note that I think this is what separates us perhaps and a country like China, which has an entirely different outlook or format towards its foreign policy -- policy towards other countries of the world.

Last year we had a hearing on the Pacific region and one of your colleagues from the State Department complained that China and Taiwan are doing checkbook diplomacy amongst Pacific island nations; they're buying them off by writing out a checkbook and all this. And I said wait a minute, my understanding we had $8 billion worth of cash in Iraq that we can't even account for that we gave to the Iraqi people. I said, now which is a better form of diplomacy, cash diplomacy or checkbook diplomacy?

So we have to be a little careful too in pointing fingers saying who's doing this and that, and if we're not doing the same as well. I just wanted to share that concern.

Question: our foreign assistance program -- how does our foreign assistance program compare to I guess you might say Russia and China? Because they're right borderline with the Central Asia.

MR. BOUCHER: I don't have total numbers on Russia and China. I'm not sure they're widely available. But our assistance in this region over the last couple of years has gone down; three or four years ago we were about $135 million; this year we're just slightly over $100 million and --

DEL. FALEOMAVAEGA: Is it because they don't need our help?

MR. BOUCHER: To a very small extent. And that is, there is one set of economic reform programs that we started in Kazakhstan where they've actually agreed to take over these programs and are themselves funding these programs and replacing U.S. money. But that's -- I think it's $10 million total; they are about half way there but now funding about half, maybe a little more.

But no, by and large it's just because we haven't had the money available.

DEL. FALEOMAVAEGA: We have Peace Corps presence also in Central Asia?

MR. BOUCHER: We have Peace Corps in Turkmenistan --

DEL. FALEOMAVAEGA: How many Peace Corps volunteers we have in Central Asia, just approximate?

MR. BOUCHER: I'd have to go get you the number, I don't know.

DEL. FALEOMAVAEGA: I'd be very interested to know for the record.

MR. BOUCHER: (Aside.) We've got them Turkmenistan and in Kazakhstan, right? So that means we've got them in Kyrgyzstan -- we're doing a poll here of the ambassador. So we've got Kazakhstan, Turkmenistan and Kyrgyzstan we've got Peace Corps volunteers. But I'll get you the numbers later.

And it's a very important program. During all the difficult period of the Niyazov's presidency in Turkmenistan -- of dictatorship, really -- we had Peace Corps volunteers teaching English and helping people throughout the country. I think that was an important part of just maintaining a relationship with the country, but with the people of the country especially.

DEL. FALEOMAVAEGA: What about foreign students attending American colleges and universities. You know we probably have the largest number of foreign students attending American colleges and universities. My last number I think was almost half a million foreign students attend American colleges and universities.

And I was just curious, how many from Central Asia -- how many students from Central Asia attend American colleges and universities?

MR. BOUCHER: Total is probably several thousand. The Kazakhstan -- I mean, you asked how they're developing, and one of the really remarkable and I think very, very positive things they've done is they've taken a certain chunk of their oil and gas money and put it in scholarships.

And their goal, I think they're working up towards 3,000 scholarships a year for their students that they pay for their students to go abroad, and a large quantity of those come to the United States.

We've encouraged Turkmenistan to set up a similar program as it develops its gas reserves, because that's probably the best investment you can make in a long-term development of a country. But also, as you yourself implied, that the students in the United States are probably the best investment you can make in a long-term relationship with the United States and we're very supportive of that. We run a variety of programs from high school programs to universities; there are specialist programs for exchanges back and forth with the countries of this region. We're always looking for money and ways to expand that.

DEL. FALEOMAVAEGA: You had mentioned earlier about the fact that one of the basic reasons why we want to build a missile defense system in Czechoslovakia and Poland was to make sure that no rogue state in that region would ever do us harm. Do you consider Russia a rogue state as well?

MR. BOUCHER: As I said, the missile defense system is not designed to counter Russia.

DEL. FALEOMAVAEGA: So President Putin's concerns are really not founded -- unfounded, I mean.

MR. BOUCHER: We don't think so. But again, I've got -- there are many people much more expert in the State Department on that and they could explain it to you better.

DEL. FALEOMAVAEGA: Oh come on, Mr. Secretary, you know more than that. I'm just curious because it just surprises the heck out me as to why we're doing this. The pipeline as has been proposed and we had discussed it earlier, do you really see that this could be possible, in doing this --

MR. BOUCHER: Trans-Caspian pipeline?

DEL. FALEOMAVAEGA: Yes.

MR. BOUCHER: Initially what they're looking at for the export of oil from some of the new wells that are coming online in Kazakhstan is to use an onshore pipeline and then ships -- barges that go back and forth to get some of the oil across the Caspian. Depending on how Turkmenistan develops, there may be a need for gas to flow along that route. And that's a question that we've been pursuing. We've been talking to the countries and the companies about it. There are a few political matters, but largely these things happen or don't happen based on the commercial viability.

If you look, say, at the history of the Baku-Tbilisi-Ceyhan pipeline, the one that came from -- goes from Azerbaijan across to Turkey, you know, that was discussed for many years by governments and then when the commercial development began that's when it really gelled and started to happen. That hasn't quite happened yet with the Trans-Caspian routes, but someday it might.

DEL. FALEOMAVAEGA: Mr. Ambassador, I sure appreciate your patience and some of the questions I wanted to raise. And again, I regret that some of my colleagues are unable to make it to the subcommittee hearing this afternoon. As you know, we are anxiously awaiting General Petraeus and Ambassador Crocker's presence coming here tomorrow and I'm sure that this is probably the reason why many of the members are all worked up and trying to get this thing done for tomorrow.

But I really, really appreciate your coming in to share with the subcommittee some of the latest happenings in that region, which I consider very important. And unfortunately, it doesn't seem to have the visibility and the focus as much perhaps as other regions and even among the countries. But I sincerely believe that in the coming years this region definitely will be a very, very critical -- will play a very critical role as far as energy policies both regionally as well as internationally is concerned and the fact that also Russia and China will play a very important and vital role. And so I hope that our country will continue to engage, be proactive and not reactive and certainly expressing also a sense of appreciation for their helping us and cooperating with us in the current situation that we're faced with in that region.

With that, Mr. Secretary, I don't have anymore questions, and if you have any statements you'd like conclude.

MR. BOUCHER: I just want to thank you for having me over today. And thanks for your personal interest and your travel to this region. I'm glad to be able to work the policy with you.

DEL. FALEOMAVAEGA: And like they say, nothing personal, strictly business. Thank you, Mr. Secretary.

(Sounds gavel.) Hearing is adjourned.


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