31 March 1999 - Across the Stans

Turkmenistan-Uzbekistan-Kazakhstan-Kyrgyzstan, not to speak of Georgia and Azerbaijan-the ancient lands across which the fabled Silk Road and other eastern caravan routes wound between Asia and Europe-are some of the world’s most intriguing and romantic paths.

Out here in the Stans the geography is huge. Turkmenistan is slightly larger than California, as is Uzbekistan. Kazakhstan is the size of Western Europe. Such vast countries need good roads as much as we travelers do. Now that the Russians have pulled out of this region, and with them the military need to maintain flawless routes, the roads are not maintained. The new leaders spend their meager funds on themselves, not their countries’ inadequate infrastructure. All the roads here are asphalt, with myriad and frighteningly large potholes and crazy ripples and almost always without a white divider line or markers of any kind. When we’re lucky we make 50 mph, but we usually average 30 mph. Every half hour or so we encounter a police roadblock, and our sunburst-yellow convertible, a curiosity, is always stopped.

Oddly enough we haven’t had to pay any bribes, possibly because the incredulous police can’t quite figure out what we’re doing here. The few foreigners in this part of the world do not drive their own cars, and there are no female drivers, period. Plus, Paige is blue-eyed, fair and attractive, as disturbing and strange in the outback of the Stans as a woman camel-driver colored mauve would be in the U.S. Midwest.

As Paige and I push eastward through these lands, we find much of the old romance is gone. Diesel trucks and their roar have replaced the camel and its caravan bells. Even worse, these old lands suffer from the pillage exacted during the occupation by the former U.S.S.R. Once girding and protecting Russia’s southern underbelly, these countries today bear some of the world’s worst environmental disasters thanks to Russian occupation.

When we last reported in we were in Istanbul expecting to collect our visas to enter Iran. I am one of Iran’s biggest friends, an investor who likes the country so much that I’ve been putting money into its public stock market over the past five years. (Yes, it has a public stock market, and yes, it’s been open that long.) No, we were told in Istanbul by the Iranians, your visas aren’t here yet. Pick them up in Baku on your way.

However, in Baku, the capital of Azerbaijan on the Caspian Sea 150 miles from Iran, the Iranians announced they had no visas for us, but they would be happy to start the application process. As we had been promised visas by the Iranians for more than six months, I recognized a diplomatic stall when I heard one. We would ask and ask; we would never be told no; but then we’d never obtain the visas. We were left with only four choices: Head west, back where we’d come from, go north to Chechnya into a war zone where kidnapping and bombing are a national sport, go south through Iran whih was impossible without a visa, or cross eastward on the Caspian Sea, skirting Iran. We chose the latter.

And how? By ferry. Only one boat crosses the Caspian from Baku to Turkmenistan, one I had in fact taken in 1990. I remembered it as wretched, but after we arrived in Baku, we traipsed down to the waterfront to inquire.

The ticketmistress said, “Yes,” we could indeed cross. We asked if we could reserve cabins and space for our vehicle. “No, no, no,” she said. Well, when does the boat sail? “There is no schedule,” she answered. “Come down every day and when the boat’s ready to go, I’ll tell you and you’ll drive on board.” But we want to make sure there’s room, we argued. “No need,” she said, “there’ll be plenty of room.” We protested; she remained firm.

Our forced stay in Baku gave us a chance to sample daily life. We feasted on kutab, a flour pancake that contained ground meat, sometimes seasoned with paprika, sometimes with sour cream and herbs. We visited caravansaries, an inn built around a large court to accommodate caravans, which in the old days — days dating back hundreds and hundreds of years — served camel and mule drivers transporting goods from China to Europe the same way truckstops serve America’s transcontinental 18-wheelers with hot food, baths, rooms, fuel for the beasts of burden, and amusements. Their rooms for travelers are about the size of Motel 6 rooms, and while today there are no more camel drivers, the musicians and belly dancers have returned.

The caravanseries were closed in 1990, the last time I was here, but since then, entrepreneurs have turned them into first-class restaurants. We’re able to report that at the finest restaurant in Baku a five-course dinner for two, including all the wine you can drink and the tip, comes to $72.

Reflecting on our prior few weeks in Turkey, I began to have a more positive notion of its future. To my surprise, I discovered that three or four of Turkey’s companies are the largest of their industries in Europe, which along with Turkey’s youthful population and its new-found ability to manufacture quality products at a competitive price made me realize that Turkey could be ready for a secular change for the better. With Russia a basket case, it has a real chance to be the economic engine of this part of the world, much what Germany is to Europe and South Africa is to sub-Saharan Africa. The Turks’ influence is moving east, too. In Turkmenistan, now that the communists are gone, no less than six government ministers are no longer Russians but Turks.

We found Turks throughout the vast tract from Turkey to China. Turkish citizens’ expertise, money, companies, and entrepreneurial energy have flooded back into the vacuum left by the departing Russians. The Turks are reclaiming the whole area which was known as Turkistan as recently as 75 years ago. I’m not ready to invest in Turkey yet, but I’m following developments there closely.

In the streets of Baku, we were often offered bargain caviar and saffron. We visited the bazaars, which in the center of every town and city of this region are its department store, strip mall, and supermarket all rolled into one. Everything is for sale from hundreds of colorful stalls in Asian bazaars — a wide variety of melons and vegetables; spare parts for autos, trucks, and motorcycles; clothes for men, women, and children; pots and pans; furniture; CDs, radios, and CD players; plumbing fixtures; and under the table, black-market items such as pistols, Scotch whiskey, and foreign currencies.

Downtown Baku was littered with unfinished office buildings on which construction had stopped when the money ran out, which was when the price of oil plunged. Several centuries ago, hundreds of years before we developed the Pennsylvania oil fields, the Azerbaijanis used the oily black tar oozing out of the ground for cooking and heating. Then Azerbaijan became the first great oil province, as little drilling was required to get the oil; the Nobel brothers (the fellows who established the prizes), the Rothchilds, and British Petroleum all made easy fortunes. At the turn of the century, half of the world’s oil came from the Caspian Region. Now that the Berlin Wall is down, the West has come back. New production-sharing arrangements with foreign firms committed $30 billion to Azerbaijan oil-field development if new hydro-carbon deposits can be found, which has not happened so far. Already, three western companies, stung by losses and the possibilities of even more, have pulled out.

To our amazement, despite Azerbaijan’s Muslim heritage, in the streets of Baku we saw lots of bleached hair, short skirts, and dark makeup on the women. Fur coats are popular, too. We saw no women under 50 wearing the chador, the traditional face veil. Scantily-clad young women dominate the entertainment in many restaurants. We’ve come to the conclusion that even in Muslim countries, sex sells.

Today Georgia, Armenia and Azerbaijan are at each other’s throats over territorial disputes, draining these countries’ vigor. There are no Russian troops in Azerbaijan to prevent shooting, but Turkish or NATO troops may be invited in to counter Russian influence. It’s a universal political truth that if some superior power, such as a state or an empire, doesn’t have the local monopoly on violence, conflict tends to erupt. In the 19th century, this region was a prime playing field for the ‘Great Game’ between the Russians and the British, a sort of Cold War in the decades before the First World War. Today the Great Game has returned, four-sided this time, with America, Turkey, Iran, and Russia pushing and shoving over rights to pipelines and oil reserves. The alliances often shift quarterly. Russian troops are in Georgia (unwanted) and Armenia (wanted), making these struggles all the messier.

After three or four days of our regular visits, the Baku-harbor ticketmistress said the ferry was ready to go because the train had finally carrying goods to be ferried across the Caspian. Indeed, there was plenty of space on the ferry, as not many Azerbaijans were interested in crossing to Turkmenistan.

The former communist-party bosses, who had built this boat in 1985 solely to meet some long-forgotten five-year plan, had not built it for durability. Back in 1990 it had already become a floating wreck; now it was a floating disaster. Not only had nothing been painted or maintained, but the ship had been built so shoddily it would have cost a fortune to keep up. We thought we were in luck when we obtained first-class cabins at black-market rates, but they turned out to be so filthy, with so many holes in the walls and such thin, threadbare mattresses and nasty blankets that we couldn’t stay in them. We arranged to stay in the crew’s quarters, which while still terrible, were more livable than the first-class cabins.

This time the trip took 18 and not the former 12 hours. The fire doors were rusted, no lifeboat could be dispatched because the lowering tackle had rusted frozen, and rust had eaten holes everywhere on the hull. One day you’ll read about a ferry sinking in the Caspian, drowning scores, and it will be this ferry collapsing under the strain of doing what it was purportedly designed to do by the communists. We made it across but not without strong concerns about our safety.

To give you a sense of how our route has progressed, we crossed Turkey into Georgia, stopping in Batumi and Tbilisi. From Georgia we drove to Baku, which we explored until our ferry departed. We crossed the Caspian Sea on the rust-bucket, and on the other side, skirting Iran, we stopped in the Turkmenistan cities of Turkmenbashi, Ashkabad, and Charjou. We drove north to the Uzbekistan cities of Bukara, Samarkand, and Tashkent. As we made our way across Turkmenistan, we came across herds of wild camels, just as you might come across wild deer in the U. S. Indeed signs warned ‘Beware of Camels.’ Here in Turkmenistan women, covered from head to toe except for their faces, wore brightly colored clothes, often with bright scarves. Again we asked ourselves what had happened to Muslim modesty. Our answer was the communists had stomped out three generations of Muslim attention to Islam, and that while the religion had made a comeback, it had not yet made a big comeback.

The important stakes in this part of the world are immense pools of oil and gas, especially the huge reserves around the Caspian Sea where five countries that border the sea often spar over how to divide the spoils. Iran, with smaller reserves on its Caspian shore, would like to divide the petro-treasures according to formula, not geography, whereas those on whose shores the oil and gas resides, such as Azerbaijan and Turkmenistan, prefer to arrange unilaterally for western partners to drill on their soil, which they insist extends far into the Caspian.

It’s even debatable whether these countries are true countries. For instance, Turkmenistan was shoved together by Stalin out of a vast stretch of desert and five nomadic tribes. (The suffix ‘-stan’ means ‘camp.’) This entire region is unstable, with border disputes, water disputes, oil disputes, ethnic disputes, and pipeline disputes disrupting every rational political discussion. All too typical of the problems that keep this region mired down is the Turkmen leader, who has renamed himself ‘Turkmenbashy’ or ‘father of all Turkmen,’ and spent much of his country’s hard currency building monuments to himself.

Everywhere in Turkmenistan hang political posters that remind me of those personality-cult posters from the Nazi era that read ‘One People, One Nation, One Furher,’ only here they read, ‘One People, One Nation, One Turkmenbashy.’

The decline of the value of the currencies of Kazakhstan and Kyrgyzstan are accelerating, and their stock markets are moribund. The Turkmen and Uzbekistan currencies have collapsed to the point that on the black market the dollar goes at more than three times its official rate, a very reliable indicator warning that big trouble is in the offing, trouble such as bombs exploding, violent strikes, assassination attempts, local strife of every sort. In Algeria, the troubles led to the rise of Islamic fundamentalism and civil war. Here sooner or later something similarly messy will occur.

We passed through the Karakum Desert, south of the Aral Sea. The Aral is in the midst of being renamed the Aral-Kum, or “Aral Desert,” because what was once the world’s fourth-largest lake has been turned by man into the world’s largest ecological disaster.

I’d like to think the Russians in the 20th century contributed more to the world than enormous space hardware, first-class Olympic athletes, and chess grandmasters by the hundreds, but it’s difficult to come up with much more. History will chiefly remember the Russian communists for the dozens of disasters created by their nutty economic policies.

Hard as it may be for the many folks unschooled (either formally or in the rough-and-tumble of everyday commerce) in economics to grasp, marketplace opportunity, or the Invisible Hand described by Adam Smith, performs a better job of regulating the economic world than any number of central planners. It took 70 years of hard work, but the Russians’ goofy economic practices and theories impoverished not tens but hundreds of millions of people around the world. Today Russia’s self-hailed glorious economy is in shards, about the size of Microsoft’s value on our stock exchange. Their other disasters are harder to measure but no less devastating.

A major U.S.S.R. disaster is its role in the drying up of the Aral Sea. In the early 1960s, Moscow decided it needed to become self-sufficient in cotton. To do so, it irrigated vast cotton fields in its southern regions by diverting two rivers, the Amu Darya, and the Syr Darya. Russian cotton was raised on three-million acres, and 60 percent of the nation’s cotton needs were met by this new-found southern crop. The party bosses responsible rose mightily in rank and were promoted to plum assignments in Moscow. However, these two rivers fed the Aral Sea, 25,600 square miles of salty lake northeast of the Caspian, the largest lake between the Caspian and the Pacific Ocean.

For thousands of years the fresh waters from these two rivers had kept the Aral Sea’s water and salt levels in perfect balance. The Russians built dams across both rivers, and dug an 850-mile canal with a far-reaching system of feeder canals. I suppose Soviet engineers figured the Aral might dry up a little, that towns and villages on the shore might find themselves no more than a mile or so from the water’s edge, but nothing serious. Anyway, they planned to divert some water from Siberia into the lake, which would take care of any problems. However, they didn’t, and over the next 30 years two-thirds of the Aral Sea disappeared, leaving behind a dry bed of poisonous salts and killing the sea’s fish and its sea-side vegetation.

What bothers me most about communist and socialist schemes is their self-righteousness, that what capitalists think of as the Invisible Hand and communists might call Greed at Work is less noble and uglier than their grand and lofty plans. It bothers me because economic plans created by those without a felt economic stake in them virtually never work, whether we’re talking about the state’s monopoly of public education and the postal service in the U. S. or vast political schemes to irrigate millions of acres. What they call greed is the engine — and the only engine — that has created virtually all the prosperity that has pulled mankind above the level of subsistence.

By 1995 the Aral Sea had lost three-quarters of its volume. Today more than 100 million tons of dust — a toxic silt composed of salt, sand, fertilizers, DDT, and industrial and household poisons — are swept up and carried away a year by the prevailing winds. As a result of the loss of water, the winters are colder than before and the summers hotter and dryer. Rain has dropped off considerably, pasture is gone, local children are ill from the toxins blown off the dry seabed, and local adults’ life expectancy is shorter than in other parts of the world.

However, the damage reaches much farther. This toxic saltbed is as dangerous to the entire planet as a large active volcano. The Aral sits in the path of strong east-to-west air currents that carry these deadly aerosols to high layers of the atmosphere, where they are spread around the earth. The signatures of Aral toxins are found in the blood of penguins in the Antarctic, and its distinctive poisons have fallen on glaciers in Greenland, forests in Norway, and fields in Belorussia, thousands of kilometers away. This is a planet-wide problem, and even now the two rivers that were diverted could be re-diverted, but local cotton, rice, and tobacco farmers in the south would be put out.

Western newspapers carry stories about the pipeline dispute raging between the U.S. and Turkey on one side and the Russians and Iranians on the other. The U.S. and the Turks want a new pipeline to cross under the Caspian, under their control, whereas the Russians and Iranians want the gas to go through their territories.

Now that I’ve been on the ground here a few weeks I can confidently predict this pipeline will not happen for many years, probably never. Not only would it pass through one of the world’s worst earthquake zones, but no feasibility studies have been done or money raised. Such an expensive pipeline will mean that unless the world price of hydro-carbons rises dramatically the pipeline will not be economically feasible. A somewhat more major problem, however, is that sooner or later all these countries will be bankrupt, and not as they predict, ‘the next Kuwait.’

What’s happening here is a part of an old, old drama. When an empire falls, certain events follow, as seen in Africa after the collapse of the British Empire and Rome after its collapse. One, there may or may not be an “election,” (one man, one vote, one president-for-life) but those who were the local “liberators” from the empire become the post-colonial bosses. These presidents-for-life have to age and die before their grip on the levers of power can pass to other hands.

Two, diverse peoples jammed together and forced to get along by the empire after the breakup push away from each other. Eastern Europe is now breaking up with the same sort of “tribal” wars that have been occurring regularly in Africa. Ethnic groups in the Stans will soon begin agitating to establish their own ethnic independence.

The competitive advantage of this part of the Asian world is its gigantic supply of raw materials. Turkmenistan has the world’s fifth largest reserves of natural gas and huge oil resources, as well as coal, sulfur, and salt. Uzbekistan is now the world’s third largest cotton exporter, a major producer of gold and natural gas, and a regionally significant producer of chemicals and machinery. Kazakhstan contains significant resources in natural gas, petroleum, coal, gold, uranium, silver, copper, lead, zinc, tungsten, and molybdenum.

None of these abundant assets will do either of these countries or any of the other countries out here any good if they can’t learn to stop changing the rules every few months. Those countries need a permanent and stable legal infrastructure so lenders can lend and be sure they can obtain their collateral if the borrower defaults. Entrepreneurs need banks they can count on, tariffs that don’t change without warning, courts that are fair, regulators who aren’t thieves, and currency rules that don’t change.

None of this is true in the Stans, and prosperity won’t arrive until it is.