Silk Road Strategy Act of 2006

109th CONGRESS
2d Session

S. 2749

To update the Silk Road Strategy Act of 1999 to modify targeting of assistance in order to support the economic and political independence of the countries of Central Asia and the South Caucasus in recognition of political and economic changes in these regions since enactment of the original legislation.

IN THE SENATE OF THE UNITED STATES

May 4, 2006

Mr. BROWNBACK (for himself, Mr. KYL, and Mrs. HUTCHISON) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations

A BILL

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Silk Road Strategy Act of 2006'.

(b) Table of Contents- The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

TITLE I--UNITED STATES POLICY TOWARD COUNTRIES IN CENTRAL ASIA AND THE SOUTH CAUCASUS

Sec. 101. Relationship between the United States and the countries of Central Asia and the South Caucasus.

Sec. 102. Protecting United States business abroad.

TITLE II--PROTECTION AND PROMOTION OF UNITED STATES INTERESTS IN CENTRAL ASIA AND THE SOUTH CAUCASUS

Sec. 201. Relationships between the United States and the countries of Central Asia and the South Caucasus since passage of the Silk Road Strategy Act of 1999.

Sec. 202. United States interests in the countries of Central Asia and the South Caucasus.

Sec. 203. Sense of Congress on safeguarding of United States interests in the countries of Central Asia and the South Caucasus.

SEC. 2. DEFINITIONS.

In this Act:

(1) CENTRAL ASIA AND THE SOUTH CAUCASUS- The term `Central Asia and the South Caucasus' means the area including the countries of Afghanistan, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

TITLE I--UNITED STATES POLICY TOWARD COUNTRIES IN CENTRAL ASIA AND THE SOUTH CAUCASUS

SEC. 101. RELATIONSHIP BETWEEN THE UNITED STATES AND THE COUNTRIES OF CENTRAL ASIA AND THE SOUTH CAUCASUS.

(a) In General- The United States has significant long-term interests in the countries of Central Asia and the South Caucasus. These interests concern security, economic development, energy, and human rights. Accordingly, it is the policy of the United States to seek political and economic stability in the social development of, and cooperative relationships with, the countries of Central Asia and the South Caucasus, including by providing assistance in accordance with the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.).

(b) Democracy, Tolerance, and the Development of Civil Society- It is the policy of the United States to promote independent, democratic government and the protection of human rights, tolerance, and pluralism in Central Asia and the South Caucasus within the overall framework of United States national interests, including the global war on terrorism, counterproliferation efforts, the fight against extremism and ethnic and religious fanaticism, and energy security.

(c) Conflict Resolution- It is the policy of the United States to aid in the resolution of ethnic, religious, interstate, and intraregional conflicts and to support political, economic, and security cooperation in Central Asia and the South Caucasus in the interest of fostering regional stability, development of the rule of law, cooperation based on free markets supported by strong institutions, and economic interdependence.

(d) Economic Assistance- It is the policy of the United States to reduce poverty in Central Asia and the South Caucasus through economic growth, promoting sustainable development through private investment in all economic sectors, including agriculture, education, private sector development, and capacity-building.

(e) Development of Infrastructure- It is the policy of the United States to aid in the development of infrastructure in Central Asia and the South Caucasus for energy and energy transit, communications, transportation, and health and human services.

(f) Defense and Border Control Assistance- It is the policy of the United States to assist the countries of Central Asia and the South Caucasus in developing indigenous defense capabilities, securing borders, and implementing effective controls to prevent the proliferation of materials related to weapons of mass destruction and trafficking in conventional weapons, persons, and narcotics.

SEC. 102. PROTECTING UNITED STATES BUSINESS ABROAD.

Consistent with the purposes of the Overseas Private Investment Corporation, it is the policy of the United States to promote and protect the interests of United States businesses and investments in Central Asia and the South Caucasus.

TITLE II--PROTECTION AND PROMOTION OF UNITED STATES INTERESTS IN CENTRAL ASIA AND THE SOUTH CAUCASUS

SEC. 201. RELATIONSHIPS BETWEEN THE UNITED STATES AND THE COUNTRIES OF CENTRAL ASIA AND THE SOUTH CAUCASUS SINCE PASSAGE OF THE SILK ROAD STRATEGY ACT OF 1999.

(a) In General- Since the enactment of the Silk Road Strategy Act of 1999 (22 U.S.C. 2296 et seq.), significant changes have occurred to the political, economic, and security conditions in Central Asia and the South Caucasus, requiring modifications to United States policy toward the countries in the region in order to protect and promote United States interests.

(b) Findings- Congress makes the following findings:

(1) Since September 11, 2001, the need for mutually beneficial security cooperation between the United States and the countries of Central Asia and the South Caucasus has grown, while the United States has come to view democratization of the countries in the region as essential to enhanced security.

(2) Such development features popular sovereignty, institutional checks and balances, and a vibrant civil society. These in turn require a civil administration that is competent, honest, respectful of citizens' rights, and sensitive to the needs of a market economy.

(3) The liberation of Afghanistan from Taliban misrule and the new course in Afghanistan toward political and economic openness make possible the country's reintegration into Central Asia.

(4) The ouster of the Taliban from Afghanistan has diminished threats to that country's neighbors in Central Asia, allowing for accelerated progress toward democracy, open economies, and the rule of law across the region. Afghanistan's embrace of popular sovereignty and political pluralism demonstrates the universal applicability of these values.

(5) The Governments of Azerbaijan and Kazakhstan, which have contributed to United States military deployments in Iraq, Afghanistan, and Kosovo, are key United States partners in diversification of energy sources and transportation routes, enhancing and contributing to United States energy and security interests.

(6) In recognition of global and regional threats to stability, prosperity, and democracy in Afghanistan, including terrorism, political-religious extremism, and production and trafficking of narcotics, and in recognition of Afghanistan's geographic location and cultural and historical identity, Afghanistan should be considered to be among the countries of Central Asia, and not separate from them.

(7) In recognition of security cooperation from the Government of Kazakhstan, including deployment of the Kazakhstan contingent in Iraq, progress toward a market economy, United States business participation in energy and infrastructure development in Kazakhstan, and an ongoing Government of Kazakhstan policy of ethnic and religious tolerance, a relationship with Kazakhstan is of high importance to the United States.

(8) The 2003 Rose Revolution in Georgia, the 2004 Orange Revolution in Ukraine, and the 2005 Tulip Revolution in Kyrgyzstan demonstrate the essentialness of steady progress toward democracy and the rule of law. While these revolutions resulted in the ouster of corrupt and ineffective regimes by largely peaceful protest movements, the long-term interests of security, stability, good governance, and economic growth are better served by evolutionary democratization.

(9) Relations between the United States and the Republic of Kyrgyzstan are of great importance, in particular in view of the democratic developments in that country and in light of the location of a United States military base at the Manas Airport near Bishkek, Kyrgyzstan.

(10) The President of Turkmenistan, Saparmurat Niyazov, engages in persistent gross violations of human rights, including the suppression of democratic and religious freedoms, brutality, and leads a government that lacks accountability and rejects the rule of law.

(11) There has been a deterioration of democratic freedoms, rule of law, norms of democracy, and human rights in Uzbekistan, as well as a deterioration of relations between the Governments of the United States and Uzbekistan.

(12) The President of Uzbekistan, Islam Karimov, engages in continued gross violations of human rights, including the killing of hundreds of protestors at a rally in Andijan in 2005.

(13) The pressing need for diversification of energy resources makes access to Central Asian and Caspian Sea oil and gas resources a high energy security priority of the United States.

(14) The dangerous and destabilizing policy statements of the President of the Islamic Republic of Iran, Mahmoud Ahmadinejad, and actions by the Islamic Republic of Iran in the area of nuclear power, including uranium enrichment, threaten international security in general and regional security in Europe and Asia in particular.

SEC. 202. UNITED STATES INTERESTS IN THE COUNTRIES OF CENTRAL ASIA AND THE SOUTH CAUCASUS.

Congress makes the following findings:

(1) The economic and political stability of the countries of Central Asia and the South Caucasus has a direct impact on United States interests.

(2) Stability, democratic development, protection of property rights, including mineral rights, and rule of law in countries with valuable energy resources and infrastructure, including Kazakhstan, Azerbaijan, and Turkmenistan, are important to safeguard United States energy security.

(3) Preventing any other country from establishing a monopoly on energy resources or energy transport infrastructure in the countries of Central Asia and the South Caucasus that may restrict United States access to energy resources is important to the energy security of the United States and other consumers of energy in the developed and developing world.

(4) Extensive trade relations with the energy-producing and energy-transporting states of Central Asia and the South Caucasus will enhance United States access to diversified energy resources, thereby strengthening United States energy security, as well as that of energy consumers in developed and developing countries.

(5) Stability in the countries of Central Asia and the South Caucasus is important to the security interests of the United States.

(6) In order for the United States to maintain bases for its troops in the proximity of the military conflicts in Afghanistan and Iraq, the United States should seek to maintain good relations with the countries of Central Asia and the South Caucasus.

(7) It is in the interest of the United States and the global war on terror for the United States to maintain friendly relations with Muslim states in Central Asia and the South Caucasus that promote democracy, open economies, and the rule of law in the region.

(8) It is in the interest of the United States to make any and all efforts to prevent the proliferation of materials for weapons of mass destruction and the trafficking in narcotics and persons, much of which can be attributed to porous borders and insufficient security between the countries of Central Asia and the South Caucasus.

SEC. 203. SENSE OF CONGRESS ON SAFEGUARDING OF UNITED STATES INTERESTS IN THE COUNTRIES OF CENTRAL ASIA AND THE SOUTH CAUCASUS.

(a) Promotion of Democracy, Tolerance, and the Development of Civil Society- It is the sense of Congress that political legitimacy is founded upon popular sovereignty and is critical to stability, that key components of political legitimacy are regular elections, and that the United States Government should engage in the following programs and activities designed to promote democracy, tolerance, and the development of civil society in Central Asia and the South Caucasus:

(1) Support for free and fair elections, including the formation of election bodies that are broadly representative of the political spectrum and the maintenance of equal conditions for candidates and parties.

(2) Instruct the United States delegation to the Organisation for Security and Cooperation in Europe (OSCE) and to other international bodies to resist efforts by some member states to undercut the role of OSCE election monitoring conducted by the Office for Democratic Institutions and Human Rights (ODIHR) and to aggressively promote the role of independent and local election monitors.

(3) Support for the development of independent media outlets, including print, radio, television, and Internet, and the provision of authoritative news and a broader range of media options than is currently available.

(4) Support for satellite television broadcasting into Uzbekistan, Turkmenistan, and Iran in the native languages of these countries through Radio Freedom/Radio Liberty, Radio Farda, Al Alam, and independent radio and television broadcasters in the United States and Europe, including in the languages of Azerbaijani, Pashtun, Persian, Uzbek, and Turkmen, specifically to inform the populations in those countries of the ideas and values of freedom, democracy, and human rights and development issues relating to their diasporas in the United States.

(5) Assistance in the establishment of regional academic programs to train civil servants in modern systems and principles of good governance, including the rule of law, transparency, conduct of elections, respect for citizens' rights, and the needs of a market economy.

(6) Support for the establishment of reputable think tanks, independent public policy research organizations, and centers for strategic and economic studies in the countries of Central Asia and the South Caucasus.

(7) Support for the development of separation of powers, specifically the emergence of independent legislative and judicial branches of government.

(b) Conflict Resolution- It is the sense of Congress that the United States Government should engage in the following programs and activities designed to promote conflict resolution in Central Asia and the South Caucasus:

(1) Active assistance in the resolution of regional conflicts and the removal of impediments to cross-border commerce.

(2) Recognizing that China and Russia are neighbors and regional powers of Central Asia and, in the case of Russia, of the South Caucasus, and that those countries have in the past taken steps at odds with United States security interests, such as in the case of curbing the United States military presence in Uzbekistan, the continuation and expansion of a strategic dialogue with Russia and China, including United States participation as an observer in the Shanghai Cooperation Organization (SCO) for the purpose of promoting stability and security in the region.

(3) Acknowledgment of the importance of maintaining peace in the Caspian region for the prosperity and long-term stability of the countries in greater Central Asia, including calling on the Caspian littoral nations, including Iran, to step up maritime border delineation and demilitarization efforts, making the Caspian Sea a zone characterized by peace and cooperation.

(4) Encouragement of conflict settlement in the South Caucasus to further increase trade, specifically by supporting the restoration, expansion, and usage of the railroad through the Georgian region of Abkhazia, the highway through the Georgian region of South Ossetia, and the `Road of Peace' through the Azerbaijani region of Nagorno-Karabakh.

(5) Calling on the Governments of Azerbaijan and Turkmenistan to resolve the outstanding debt issue, which is hindering cross-border cooperation and development, and to jointly develop the Kyapaz (Serdar) disputed offshore oil field, which would contribute to the peace and stability of the Caspian region.

(6) Calling on the governments of the five littoral states of the Caspian Sea, Russia, Azerbaijan, Iran, Turkmenistan, and Kazakhstan, to establish a legal order demarcating the seabed and its resources based on a national sector regime, one that goes beyond the Iranian-Soviet treaties of 1921 and 1940, which defined rules for shipping and fishing, but not for oil and gas exploration and development.

(7) Assistance in the removal of legal and institutional barriers to continental and regional trade and harmonization of border and tariff regimes, including improved mechanisms for transit through Pakistan to Afghanistan and other countries in Central Asia, and the recognition of Turkey as a crucial energy transit and consumer country, vital for the successful development of large-scale energy infrastructure and cross-border projects.

(c) Economic Cooperation and International Trade- It is the sense of Congress that the United States Government should engage in the following programs and activities designed to promote economic cooperation and international trade with countries in Central Asia and the South Caucasus:

(1) Assistance in accelerating the broad and equitable privatization of state enterprises in a manner that does not promote oligarchical rule and the deregulation of national economies in a manner that allows equal access to nonresident companies to privatization procedures.

(2) Expansion of activity under the Trade and Investment Framework Agreement (TIFA), including reducing barriers to trade and investment, protection of workers' and property rights, fostering an environment of transparency and predictability, encouraging private sector growth and foreign and domestic investment, and removing impediments to increased intraregional trade and investment, particularly with respect to Afghanistan.

(3) Support for the completion of the review process of the Export-Import Bank of the eligibility of countries in the region for financing under the Export-Import Bank Act of 1945 (12 U.S.C. 635 et seq.).

(4) The facilitation of greater access for Afghanistan and other countries of the South Caucasus and Central Asia to loans from the Export-Import Bank.

(d) Economic Reform- It is the sense of Congress that the United States Government should engage in the following programs and activities designed to promote economic reform in Central Asia and the South Caucasus:

(1) Promotion of structural reforms in financial and banking institutions that increase transparency and efficiency and enhance macroeconomic stability.

(2) Promotion of the development of the Trans-Caspian Oil and Gas Pipelines (TCOP/TCGP), while encouraging the Governments of Azerbaijan, Kazakhstan, and particularly Turkmenistan to improve their business climate and investor confidence by fully disclosing their internationally audited hydrocarbon reserves.

(3) In light of greatly increased revenues from energy exports and the related dangers of macroeconomic instability and economic overheating, the establishment of a bank, the Caspian Bank of Reconstruction and Development (CBRD), where excess revenues can be funneled to infrastructure development projects in the region, and the tasking of the Export-Import Bank and the Overseas Private Investment Corporation with assisting in setting up and operating the bank.

(4) Support for countries in the region seeking qualification for Millennium Challenge Account (MCA) funds, including assistance in achieving necessary further reforms, recognizing that while Armenia and Georgia have qualified and signed compacts with the Millennium Challenge Corporation, other advanced economies of the region, such as Azerbaijan, Kazakhstan, and Kyrgyzstan, should be aided with more rapid improvement of their rankings to become first `threshold' and then `candidate' countries for purposes of such assistance.

(5) Support for countries in the region seeking accession to the World Trade Organization (WTO), furnishing assistance to facilitate economic reform for countries in the region, and extension of unconditional and permanent nondiscriminatory treatment (permanent normal trade relations treatment) to countries in the region, especially to Azerbaijan and Kazakhstan.

(6) Encouraging governments of countries in Central Asia and the South Caucasus and United States businesses operating in the region to adhere to the Extractive Industries Transparency Initiative (EITI), and in recognition that Azerbaijan, Kazakhstan, and Kyrgyzstan have joined the EITI initiative, encouraging other countries of the region to follow suit.

(7) In conjunction with increasing transparency of energy-related payments and revenues by the governments of, and companies in, the Central Asia and South Caucasus region, encouraging geological data on all energy resources and assets in the region to be made available to better understand remaining reserves, which would stabilize the global energy markets.

(8) Promotion of antimonopoly initiatives, particularly to diversify transportation routes for hydrocarbon and electric energy, and promotion of competition in these sectors.

(e) Infrastructure Development- It is the sense of Congress that the United States Government should engage in the following programs and activities designed to promote infrastructure development in Central Asia and the South Caucasus:

(1) Assistance in the development of the infrastructure necessary for communications, transportation, education, health, and energy and trade on an east-west axis in order to build strong international relations and commerce between the countries in the South Caucasus and Central Asia region and the Euro-Atlantic community.

(2) Support for activities that promote the participation of United States businesses and investors in the planning, financing, and construction of infrastructure for communications, transportation, and trade, including aviation, highways, railroads, port facilities, shipping, banking, insurance, telecommunications networks, and gas and oil pipelines.

(3) Support for the development of physical infrastructure for continental and regional trade, including the completion of the crucial core road system in Afghanistan, the linking of other regional roads with the road system, and working with other donors to complete east-west and north-south transport corridors in the region.

(4) Support for the addition of a crucial rail link in Kazakhstan from Almaty to the port city of Aktau, which would allow tankers and cargo ships to transport crude oil and other goods across the Caspian to Baku, and from there to Europe through Georgia and Turkey; this east-west corridor, which is already partially financially supported by the European Union within the Transport Corridor Europe-Caucasus-Asia (TRACECA) initiative, would greatly increase and accelerate cargo and container traffic across the Caspian Sea and from the greater Central Asian region.

(5) Support for the construction of energy transit infrastructure, including the Trans-Caspian Oil Pipeline (TCOP) in Kazakhstan, from Aktau to Baku, which would carry oil from the Karachaganak field, and the Trans-Caspian Gas Pipeline (TCGP), from Turkmenistan or neighboring areas of Kazakhstan to Baku, which would carry natural gas.

(f) Defense and Border Control Assistance- It is the sense of Congress that the United States Government should support regionwide initiatives in Central Asia and the South Caucasus to train and coordinate border control, law enforcement, and security forces between contiguous countries.

(g) Additional Mechanisms for Implementation of This Act and Achievement of Its Objectives- It is the sense of Congress that the United States Government should, for the purpose of further implementing, and achieving the objectives of, this Act, promote and support establishment of one or more of the following:

(1) A Silk Road Advisory Board, which would include experts with the necessary contacts and expertise in the region in sectors such as sustainable agricultural development, oil and gas extraction, energy transportation infrastructure planning and construction, democratic development, banking, finance, and legal reform.

(2) A specialized private sector energy consultancy, tasked with coordinating business community projects and promoting investment opportunities in trade as well as infrastructure for the production, transportation, and refining of energy and petrochemicals.

(3) An annual conference of the sponsors and beneficiaries of assistance provided pursuant to this Act to be held in conjunction with the annual United Nations Economic Council of Europe (UNECE) Energy Security Forum, which seeks to promote the security of energy supplies for all members of the Economic Council of Europe through well-balanced networks of energy transportation infrastructure, improvements in sustainable energy technology and efficiency, and through the integration of legal standards for transparent energy extraction, transportation, and pricing.

END