FACTBOX-Key risks to watch in Kyrgyzstan turmoil

LONDON, April 14 Wed Apr 14, 2010 10:04am EDT

LONDON, April 14 (Reuters) - Following last week's uprising in Kyrgyzstan, the main questions remain whether violence rises and how the United States, Russia and China react to turmoil in a country where all have interests.

The United States leases the Manas airbase to support NATO troops in Afghanistan. Russia also leases a base, while China has a long border with Kyrgyzstan and will be concerned for the growing number of Chinese residents and businesses there.

A Russian official has said Moscow alone should have a base in Kyrgyzstan.

Domestic strains appear to be the main reason for the uprising. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a full menu of stories, click on [nLDE6360UW] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

VIOLENCE OR STABILISATION?

Around 80 people were killed in the uprising that forced President Kurmanbek Bakiyev to flee to his southern stronghold, and Bakiyev is now hinting he may attempt to go into exile.

The new leadership, led by former opposition leader Roza Otunbayeva, looks to be in control of the security forces, some of whom fired on opposition demonstrators last week.

The self-proclaimed government at first offered Bakiyev safe passage abroad should he resign but on Monday said it was planning a special operation against him after he warned that any attempt to seize him would lead to bloodshed. It now says says it wants to put him on trial.

However, on Tuesday Bakiyev hinted he could leave the country if the interim government guarantee his safety and that of his family [ID:nLDE6030BA].

What to watch:

-- Does Bakiyev yield, or does the self-proclaimed government move against him? Does he have sufficient support to attack in Bishkek or control areas in the south where he has his power base and will hold rallies this week? So far, outside powers look to be abandoning him.

-- What happens with the security forces? So far, they look to have switched loyalty to the new leadership. Is this the case across the country, particularly in the south? What happens to commanders involved in shooting opposition demonstrators?

-- Does looting continue and is it put down? So far, mining businesses [ID:nLDE63C1CJ] and the minority Jewish community have been targeted [ID:nLDE6381CQ]. Does it target Chinese businesses in the capital, as some previous violence has? If so, how would China react?

-- The Ferghana Valley in the south, where Bakiyev has his power base, has been the scene of ethnic violence in the past, and there are some signs that tension surrounding the ethnic Uzbek minority may not be far below the surface. [ID:nLDE63D0RF]

SUPERPOWER POLITICS

The United States and Russia are at loggerheads, although neither publicly acknowledges this.

Washington's priority will be keeping its Manas base open while a Russian official with President Dmitry Medvedev's delegation said last week Moscow wanted it closed. [ID:nN08193339]

A senior White House adviser on Russia told reporters in Prague: "This is not some anti-American coup. That we know for sure, and this is not a sponsored-by-the-Russians coup."

Prime Minister Vladimir Putin has denied Russia played a part in the turmoil, but a Kyrgyz opposition leader, Omurbek Takebayev, said: "Russia played its role in ousting Bakiyev."

So far Russia is the only country to recognise the interim government officially -- although Medvedev warns the country is on the brink of civil war. [ID:nN13106562].

On Wednesday, a visiting U.S. diplomat said Washington was willing to help the new rulers, putting additional pressure on Bakiyev to go into exile [ID:nLDE63D01Q].

Russian Prime Minister Vladimir Putin approved a $50 million aid and loan package for Kyrgyzstan hours later.

What to watch:

-- How overt is Russian support for the self-proclaimed government, not to mention pressure to close the base? Does Russia offer military support?

-- Does the uprising worsen broader Russia-U.S. relations just as Washington hoped they were improving?

-- Do other countries -- particularly the United States and China -- ultimately recognise the self-proclaimed government or continue to support the ousted leadership?

-- How does China react? Analysts say it had lent money to the ousted government. Does it shift to the new rulers, perhaps sweetening relations with a new loan, or support Bakiyev tacitly or overtly? Does it make any comment on the U.S. base?

See also:

Interim govt draws on diplomacy to seal rule [ID:nLDE63C14V]

Turmoil puts Central Asia on alert [ID:nLD638US]

Kyrgyz unrest plays into regional rivalry [ID:nLDE6360UW]

AFGHANISTAN WAR

The United States has cut back flights through Manas, which officials it has been central to the war effort in Afghanistan, allowing round-the-clock combat airlift, airdrop, medical evacuation and refuelling. [ID:nLDE63900R]

Pentagon officials say they have other options to Manas, although they are more expensive, and the base is not in itself essential.

U.S. officials say only around 20 percent of their supplies into Afghanistan go by air, with 30 percent transported overland through former Soviet states and 50 percent by road through Pakistan, a route which is vulnerable to attack on both sides of the border.

What to watch:

-- What happens to the base? The new rulers talk of shortening of the five-year lease rather than outright immediate U.S. departure. Is it able to operate fully?

-- Does the dispute prompt Washington to rethink its strategy of relying heavily on transport through the Russian sphere of influence?

See also: High stakes for US base [ID:nN08193339]

Russia eyes U.S. airbase in Kyrgyz turmoil [ID:nLDE6308W7]

Factbox on the Manas base [ID:nLDE63720O]

ECONOMY AND INVESTMENT

Kyrgyzstan's economic problems are seen as a big factor in the uprising. Recent energy tariff increases have been unpopular and many people are angry about alleged government corruption and recent privatisation deals. The self-proclaimed government says it badly needs financial aid.

As much as 40 percent of gross domestic product is estimated to come from remittances from Kyrgyz workers in Russia, Russia's Uralsib says.

Foreign investors are mainly Russian and Chinese, with little Western interest outside the small gold mining sector. Canadian mining company Centerra Gold (CG.TO) and London-listed Chaarat Gold Holdings Ltd (CGH.L), both of which operate in the country, have seen their shares fall.

South African gold miner Gold Fields GFJJ.J said groups of villagers had seized one of its camps,one of a series of attacks and looting episodes against businesses. [ID:nLDE63C1CJ].

Kyrgyzstan has no significant oil and gas reserves, although Russia's Gazprom (GAZP.MM) is involved in exploration.

What to watch:

-- How long does the crisis last? Analysts say there is already little Western interest in investing, but that buying insurance at present would probably be impossible, potentially prompting delays in any planned ventures. Does looting continue or do the police step in?

-- Does Russia or someone else provide financial aid, or does the U.S. agree to pay more for its base?

-- Most analysts say the uprising does not mean other central Asian states are less stable, but might investors view events as a sign of heightened regional risk and charge higher premiums for investing in Kazakhstan, Uzbekistan and elsewhere? (Editing by Sonya Hepinstall)

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