ISSN 2330-717X

Kazakhstan’s Difficult Balancing Act Between Russia And The West – OpEd

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Post-Soviet Central Asia, with Kazakhstan accounting for two thirds of its land area (1,052,128.4 s.m. out of 1,547,539.9 s.m.), is – of all the places not only in Eurasia, but in the whole world – the one that is probably furthest from the sea and least accessible to the West. That said, developments since the USSR dissolution have revealed the high potential and considerable significance of the region for Western economic interests and highlighted its growing importance in global politics. Owing to substantially changed circumstances, this part of the CIS area has just recently reemerged as a zone of strategic rivalry. 

So today the situation in which Central Asia is placed appears to be clearly different from what it was before, when the region was seen as Russia’s backyard with the strictly enclosed exterior boundaries that could not be accessed from the outside world, except by permission of the appropriate central Soviet authorities in Moscow. In that new environment, Kazakhstan – due to its location and economic potential – has a particular role to play among the Central Asian nations. The favorable geographical position of the republic makes it a kind of buffer, or bridge between Russia, the rest of Central Asia, Southeast Asia and the Middle East. 

The economic reform measures put in place by its government since gaining independence led to the expansion of basic industries and large-scale export industry through American and European investment. The most visible outcomes of this is that the US Chevron-led Tengizchevroil joint venture has become Kazakhstan’s largest taxpayer. 

The Heritage Foundation’sDr. Ariel Cohen, in his articleKazakhstan Lies at the Center of the New Great Power Competition’, characterizes Kazakhstan as ‘the beating heart of Eurasia’, with which ‘the United States should continue developing economic, educational, security, and diplomatic ties’, and for good reason. Of equal, if not greater, importance is Kazakhstan to the European Union that is its biggest trade partner, with almost 40% share in its total external trade. Worthy of particular note is the fact that imports from the Central Asian republic greatly exceed EU exports to it (that is especially true as regards the biggest west European countries, such as Italy, France, Spain and Netherlands), and almost half of the foreign direct investment inflow into its economy comes from the EU. Against the background of such effective economic cooperation, it would seem that very favorable conditions should have developed for establishing closer ties between the West and the Central Asian country. Except things are actually not that simple. 

For Kazakhstan is located quite far from major markets of Western Europe and North America, but too close to Russia, its former ‘mother country’, and the latter one has by and large been considering it (or at least, its regions with favorable natural climatic conditions) as a part of its own historical territory until today. It’s not the thing that can be taken lightly or obscured behind a smokescreen of the relevant bilateral agreements, such as, for instance, the Russian-Kazakh treaty on good-neighborliness. After the USSR dissolution in 1991, the Russian leadership recognized the sovereignty and independence and territorial integrity of all five Central Asian countries, each of which had previously have the status of a full Soviet Socialist Republic, yet they continued viewing them as remaining within Moscow’s orbit as part of what President Vladimir Putin later declared to be Russia’s ‘zone of privileged interest’. Particularly tough was and partly still is their grip on Kazakhstan. 

Once the Kazakh land was used by Russia as a base to invade the rest of Central Asia, now the Russian leadership consider it as the foothold they need to sustain the other four countries of the region under their control. 

Such is the force of inertia. From the traditional Russian point of view, the notion ‘Central Asia’ actually doesn’t cover Kazakhstan, or even if it does, just partly. Such an understanding provides a framework for practical policies and strategies. During the Soviet period, Moscow always referred to the region as ‘Central Asia and Kazakhstan’. After the USSR dissolved, some Russian statesmen and politicians began to propagate a scornful attitude to Kazakhstan, positioning it as a kind of docile client state of Russia. Since Soviet times, most of the Russian population has traditionally had a low regard for Central Asia and people of Central Asian origin, calling them ‘blacks’ or ‘churki’ (a pejorative term for persons from this region). A strong bias has existed in particular for Kazakhstan and Kazakhs in the context of such vision. 

It is no wonder, then, that during the first post-Soviet decade, many representatives of the Russian establishment continued to behave as if nothing had happened, and Kazakhstan still were legally dependent on Moscow. Here are the most prominent examples of this. Speaking to the Russian magazine, ‘Nash Sovremennik’, in 1997, Murtaza Rakhimov, a head of Russia’s Bashkortostan, expressed perplexity regarding the fact that Nursultan Nazarbayev, first president of Kazakhstan, had not given the Russian language, together with the Kazakh language, the status of a State language, i.e. that he had not followed the example of the autonomous republics within the Russian Federation. At a meeting with journalists in 1998, Vladimir Rutskoy, then the governor of the Kursk region and ex-vice-president of Russia, reacted to some statement made by President Nazarbayev as follows: ‘I don’t get that kind of impudence. We have got these people down from the donkeys and taught them how to use toilet paper’.

Continuing to treat Kazakhstan the way presented above, Russian political elites apparently decided that the Central Asian republic, along with Belarus and Ukraine, should somehow be brought back under Moscow’s control. In February 2003, the Kremlin initiated a process of creating single economic space (CES) consisting of Belarus, Ukraine, Kazakhstan and the Russian Federation to translate that concept into reality. And in May 2014, it began to directly set up its Eurasian Economic Union (EAEU) with the same goal in mind. The idea of establishing such a single space seemed to be a very significant initiative in its original form, because it envisaged knitting together the CIS four largest economies and sealing their external borders, including the ones between Kazakhstan and the rest of Central Asia. For the same year, 2003, a serious attempt was made to place the latter squarely on the agenda of negotiations between Russia and Kazakhstan. To this end, the preparatory activities were undertaken. It was expected that a treaty between the Russian Federation and the Republic of Kazakhstan on the joint Russian-Kazakh protection of the latter’s external borders would be signed at the 1st Russia-Kazakhstan interregional cooperation forum with participation of their presidents, Putin and Nazarbayev, which took place in April of that year in Omsk. Yet they didn’t actually got to that. It was later revealed that Kazakh officials weren’t ready to consider such a document, let alone to sign it. Then Ukraine began gradually withdrawing from the process of forming the CES. 

It was finally left to the Russian Federation to take this matter further along with only Belarus and Kazakhstan. A customs union between the three of them had subsequently been created, and single economic space started taking shape with a view to establishing a Eurasian union. 

They were later joined by Armenia and Kyrgyzstan, two small post-Soviet countries with extremely fragile economies which are depending on Russian foreign aid in one form or other and interested to be supplied with oil and oil derivatives from Russia (and Kazakhstan) on a duty-free and even quota-free basis. In a word, they have needed donors and, most likely, considered the option to join the EAEU as a prospect of further broadening the external support possibilities for themselves. 

Among those five states, Kazakhstan appears to be a party that got a lot more to lose than the other four from being in the EAEU. It was initially assigned the task of being the second country-donor in this international organization, with the Russian Federation being the first. The end which such donorship should serve is to motivate the post-Soviet republics in general to become more open-minded to the idea of reintegrating ‘post-Soviet Space’ under the auspices of Moscow. Such objective, in the grand scheme of things, does not conform to Nur-Sultan’s policy choices and Kazakhstan’s economic interests, as it provide no added value to the nation. Initially, the EAEU is most likely intended to serve this very cause. Yet being part of that organization means contributing to implementation of the above-mentioned objective. 

Kazakhstan may already be said to have started supplying oil and oil products to Belarus on a duty-free basis. Over at least the last 10 years, Belarus has repeatedly tried to attract Kazakh oil to Belarusian refineries. It now appears that the Lukashenka regime has at last succeeded in getting get things done. On June 28, a Belarusian-Kazakh intergovernmental agreement on trade and economic cooperation in the area of deliveries of oi&oil products to Belarus was signed in Nur-Sultan as a result of negotiations between Belarusian Prime Minister Roman Golovchenko and Kazakh Prime Minister Askar Mamin. According to media reports, Belarusians have secured the right to export mazut and petroleum coke, that would be made from Kazakh oil. What good is all this to Kazakhstan? And what does the country get out of it? The answer is far from obvious.

Here’s what else is to say. While remaining a net exporter in trade with the EU, Kazakhstan is increasingly asserting itself as a net importer in trade within the EAEU. The latter is the result of the enormous trade imbalance between Kazakhstan, on one hand, and the Russian Federation and Belarus on the other. As at the beginning of 2019, these two post-Soviet countries together accounted for 39.3% ($12.0359 billion and $783.7 million, respectively) – i.e. almost two-fifths – of Kazakhstan’s total imports ($32.5964 billion) and 7.8% ($4.9216 billion and $112.4 million, respectively) – i.e. quite less than one-twelfths – of its total exports ($64.8269 billion). Such trends in trade within the EAEU dated back to the Soviet era, and they have been further strengthened with the creation of that international organization of regional economic integration.

There is still an abundance of various estimates and forecasts on the advantages of Kazakhstan’s participation in the Moscow-led post-Soviet integration project for local businesses or entrepreneurs. But the EAEU’s image only verbally looks rather attractive and promising – in actual fact, there is a core-peripheral economic relation (of postcolonial type) with regard to Russia and Belarus, on one hand, and the Central Asian giant on the other, that can be found behind it. 

Let’s see how things work and what we get as a result. Kazakhstan import in trade with the other EAEU member countries began to grow far too fast (from $11 billion to $15 billion, or by 34% in five years) than export (from $4.6 billion to $5.7 billion, or by 24% in the same period) after joining that inter-state organization.

The situation is exacerbated by the fact that the elimination of import duties (within the Union member countries) has weakened the competitiveness of a number of Kazakh industries and enterprises. On the other hand, the common external tariff(CET) for the EAEU has actuallyfenced off the Kazakh market from external imports and made it more accessible for those products of Russia and Belarus, which are not particularly in demand outside of intra CIS trade. Hence, Kazakhstan – being part of the EAEU – has to follow a course in foreign trade policy that is generally disadvantageous to the country itself. Its hydrocarbons and large trade surplus with the Western nations partially should be and is used to support the economies of other EAEU countries. As of the beginning of 2021, Kazakhstan’s total negative trade balance with the other EAEU countries has been estimated at no less than $20 billion, which went mainly to producers from Russia and Belarus. In the current context, Moscow seems willing to keep putting up with the quality and extent of the relations that exist between Kazakhstan, on one hand, and the US and EU on the other. 

But in the same breath, it seems determined to react with hostility to any attempt to further strengthen and deepen them. At even the slightest hint of it, the Kremlin’s unofficial mouthpieces start engaging in deliberate campaign of insults over Kazakh sovereignty and disparagement of Kazakhstan’s independence. Such a course of action cannot but be perceived as some kind of warning, particularly in view of what has taken place in Crimea and Donbas. Doesn’t it look like Kazakhstan, while reconciling itself to the special circumstances prevailing in the EAEU, has been trying to avoid a repetition of the situation that developed in Ukraine?!

*About the author: Akhas Tazhutov is a political analyst

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