
6. Relations with other Central Asian states
As Kazakhstan seeks a new economic model, and with a partially reforming Uzbekistan acting as an important driver, it is increasingly looking for opportunities to boost hitherto weak cooperation with its Central Asian neighbours.
For much of the post-independence period, relations between the Central Asian states of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan have been marked by low levels of cooperation and regular disputes, including trade wars, border feuds and disagreements over the management and use of water and energy. In 2015 Kazakhstan’s combined trade with Kyrgyzstan, Turkmenistan and Uzbekistan accounted for a mere 3.7 per cent of its total volume of foreign trade,292 this share having increased by less than 1 percentage point in 14 years.293 Non-tariff trade barriers among the states remain notoriously high, and no organization exists to formulate a specifically Central Asian response to urgent issues.
Within this context of non-cooperation, Kazakhstan has long shaped its identity as a Eurasian state that provides the ideal proving ground for the elaboration of regional ideas, while remaining comfortable in its position as an outlier between Russia and the rest of Central Asia. As late as 2014, Kazakhstan’s then president, Nursultan Nazarbayev, proposed renaming the country from Kazakhstan to Kazakh Eli (the ‘Land of Kazakhs’). This was in order to bolster its status as a Eurasian bridging state, as well as to distance itself from the other ‘-stans’ – i.e. Afghanistan, Turkmenistan, Uzbekistan etc. – many of which are notorious for their authoritarian practices and unwelcoming investment climates.294
In recent years, however, Kazakhstan’s leadership has begun to view itself more clearly as an integral part of the Central Asian region. A confluence of factors has underpinned the state’s identity shift and the palpable and growing trend towards greater cooperation with its Central Asian neighbours, notably:
- An upsurge in an ethnic Kazakh identity, to the detriment of the long-prevailing, civic-based Kazakhstani identity. This has been a result of demographic and educational shifts, and a growing ethno-nationalist narrative.
- A perceptible disentangling and distancing of Kazakhstan from Russia, and from the Kremlin’s policy directions.
- The focus on increasing connectivity, which has been provided with impetus from China’s Belt and Road Initiative (BRI), as a key component of Kazakhstan’s search for a strategy to fuel national development. The infrastructure investments associated with the BRI mesh with Kazakhstan’s goal of becoming a main transport and financial hub connecting East and West, while facilitating its potential integration with the rest of the Central Asian region.
- The liberalization of Uzbekistan’s economy following the death in 2016 of that country’s long-serving authoritarian ruler, Islam Karimov.
- A growing recognition among the Central Asian states that deepening regional trade is both mutually beneficial and preferable to spending scarce resources on developing import-substitution strategies, especially given the constraints associated with Russia’s economic problems.
This chapter is divided into two parts. The first part considers the contribution of each of the five factors listed above to Kazakhstan’s increasing identification of itself as an integral part of the Central Asian region. The second discusses the major trends in Kazakhstan’s bilateral relations with each Central Asian state.
Part one: Drawing closer to Central Asian neighbours
The new ‘Kazakhness’ and the Central Asian common heritage
Although Kazakhstan’s post-Soviet transition period will not end until former president Nazarbayev fully leaves the scene, the country has nonetheless entered a new era that is characterized by an increasing sense of ‘Kazakhness’ (see also Chapter 5).295 The ascendancy of an ethnic Kazakh identity is a result of two primary developments: changing demographics that favour Kazakhstan’s titular nation, and a concomitant growing ethno-nationalist narrative. Marlène Laruelle has argued that the net result of these demographic, educational and cultural shifts is that ‘everything Kazakhstani is on the decline and everything Kazakh is on the rise’.296 This new ‘Kazakhness’ has inevitably created tension between, on the one hand, the more nationalist and Kazakh-centric segments of society and, on the other, more urban segments that tend to seek greater connections with a globalized world.
A notable parallel can be drawn between current trends and those in the mid-1980s, when, at the outset of Mikhail Gorbachev’s twin policies of perestroika and glasnost, a rising nationalist discourse gained momentum in Kazakhstan. It followed riots in what is now Almaty (then known as Alma-Ata) in December 1986 that were triggered by the appointment of an ethnic Russian from outside Kazakhstan to replace an ethnic Kazakh in the post of Communist Party first secretary. The nationalist discourse had been precipitated by a demographic shift that in 1989 saw the Kazakhs become the largest ethnic group in the Kazakh Soviet Socialist Republic (SSR), accounting for 39.7 per cent of the population and outnumbering Russians for the first time since the 1920s.297 In addition, the urban share of Kazakhstan’s population had passed the 50 per cent mark a decade earlier, reaching 54 per cent in 1979.298 Educational attainment for Kazakhs was growing, as Russian-language schools were increasingly converted to Kazakh-language schools and as more ethnic Kazakhs entered higher education.299
These same demographic and cultural evolutions are recurring today. First, ethnic Russians currently comprise less than a fifth of Kazakhstan’s total population (19.8 per cent in 2018) and represent a minority in every oblast (region) in the country, including the northern oblasts that have traditionally been dominated by ethnic Russians. The ethnic Kazakh share of the state’s population passed 50 per cent in the 1990s, and Kazakhs are projected to account for 80 per cent of the population in the upcoming decade.
Second, the number of Kazakhs living in cities has quintupled since the 1970s, and half of ethnic Kazakhs are now urban dwellers.
The ethnic Kazakh share of the population passed 50 per cent in the 1990s, and Kazakhs are projected to account for 80 per cent of the population in the upcoming decade
Third, the role of the Kazakh language in education has continued to grow. At the beginning of the 1990s, only 30 per cent of schools conducted classes in Kazakh, but by 2016 that figure had jumped to 70 per cent.300 About half of university students and a majority of schools follow a Kazakh-language curriculum. At the same time, Kazakh-language media – including social media – is growing in importance, underscored by the government’s decision to undertake a phased transition from the Cyrillic alphabet to a Latin-based alphabet for the Kazakh language by 2025.301 Significantly, the expanding Kazakh-language information space is largely dissociated from the Russian-language one.302 Following Nazarbayev’s resignation as president in March 2019, and the rapid renaming of Astana, the capital, as Nur-Sultan in his honour, there have been reports that ethnic Russians and Russian speakers have emigrated from Kazakhstan in increasing number.303
The emphasis on an increasingly dominant ethnic Kazakh identity at the expense of a civic Kazakhstani one allows the state’s leadership to identify more closely with Kazakhstan’s common Central Asian heritage and, by extension, a common Central Asian region, although it remains eager to demonstrate that the country is not ‘just another “-stan”’. From 2017 onwards, in particular, following the enactment of reforms by Uzbekistan (see section on ‘the Uzbekistan factor’, below), President Nazarbayev demonstrated a marked shift in approach towards his Central Asian neighbours. He made ever more frequent references to the common heritage of Central Asians, and to their shared cultural and scientific achievements during a supposed golden age a millennium ago.304 Addressing participants at the Astana Club in November 2017, he declared: ‘I think, after a quarter of a century, everyone realizes that it is the will of God that we, the [Central Asian] states, which have a common history, religion, culture and mentality, should be together, help each other and jointly ensure security in this region.’305 Particularly during Kazakhstan’s tenure in 2017–18 as a non-permanent member of the UN Security Council, the leadership emphasized that one of its primary goals was to promote the interests of Central Asian states and advance issues important to the region.306
Moving away from Russia
By the late 1990s, the epicentre of regionalism in Central Asia had already decisively drifted from a shaky Astana–Tashkent axis to a more stable Astana–Moscow one. This gravitation was in large part a reaction to Uzbekistan’s propensity to use strong-arm tactics with its neighbours. But it was also facilitated by Russian-led efforts to include Kazakhstan in certain regional bodies – such as the ill-fated Single Economic Space – from which other Central Asian states were excluded.307 Consequently, throughout most of the post-independence period, Kazakhstan has considered Russia to be a constitutive part of any region or sub-region to which it belonged.308
In recent years, however, Kazakhstan has come to view Russia’s foreign policy as increasingly neo-colonial. It has sought to distance itself slightly from Moscow in order to limit Russian leverage in its affairs, with the result that Astana has more readily shown itself to be open to Central Asian regional initiatives.
Anti-Russian articles have become more commonplace in the Kazakh media, and there is growing resentment at Kazakhstan being drawn into information wars conducted by Russia
Scepticism towards Moscow-led regional structures has increased as Russia has failed to deliver on the benefits promised to Kazakhstan through membership of the Collective Security Treaty Organization (CSTO) and the Eurasian Economic Union (EAEU). Indeed Kazakhstan has been openly dismissive of the political agenda of Russia’s president, Vladimir Putin, in respect of the EAEU and has sought a number of safeguards to avoid being locked into the EAEU’s economic orbit.
In addition, though not least, the annexation of Crimea in 2014 and Moscow’s hybrid war in Ukraine have boosted anti-Russian sentiment among Kazakh ‘national-patriots’ in particular.309 Anti-Russian articles have become more commonplace in the Kazakh media,310 and there is growing resentment at Kazakhstan being drawn into information wars conducted by Russia.311
The search for a new economic model
Kazakhstan’s economic model, based on years of over-reliance on oil and raw-material exports, has exhausted itself
Kazakhstan’s economic model, based on years of over-reliance on oil and raw-material exports, has exhausted itself. The economy remains poorly industrialized and undiversified, requiring the government to search for new national development strategies. As part of the leadership’s plan to offset oil dependence, Kazakhstan aspires to become the transport, telecommunications and investment hub for Eurasian integration.
To this end, Nur-Sultan is focusing on the development of logistical and transport arteries, both within Kazakhstan and linking to outside markets, through its Nurly Zhol (‘Bright Path’) programme, launched in 2014. This programme, highly synchronized with China’s BRI, is behind significant construction works.312 Between 2003 and 2016, the length of roads in public use in Kazakhstan increased by more than 7,000 km, and the length of railways by more than 1,450 km. In addition, major port developments were undertaken in Khorgos, Aktau and Kuryk.313 One consequence of the push by both Kazakhstan and China for greater connectivity has been an improvement in intra-Central Asian linkages and infrastructure. The installation of fibre-optic cable along railways and pipelines for the China–Europe transport corridor, for example, also facilitates Kazakhstan’s agenda of becoming a telecommunications hub for Central Asia.314
The creation of logistical hubs in the region could have the knock-on effect of boosting intra-regional Central Asian trade and, crucially, reducing transit times for exports and imports. Kazakhstan takes the official position that the BRI will accelerate trade by helping to address the underdeveloped state of infrastructure in the region, often cited as a major reason for the high cost of transporting goods both within Central Asia and between Central Asia and other regions. In 2014, the times required for the export and import of goods across the region were two to four times greater than for similar operations in South Asia, Eastern Europe, Latin America and the Caribbean, and the Middle East and North Africa.315 The World Bank’s director for Central Asia recently noted that it is faster to send cargo from Poland to Shanghai than from one Central Asian country to another.316
However, it is important to note that poor connectivity is not the sole cause of the low levels of Central Asian intra-regional trade recorded in the post-Soviet period. Consequently, the introduction of new transport infrastructure does not in and of itself presage a diminution in the multitude of barriers that currently impede cross-border commerce. Not least of these are the informal payments that are a ubiquitous feature of the region’s border regimes. As Alexander Cooley has argued, the development of externally backed logistical networks – such as the Northern Distribution Network, used to transport non-lethal military supplies to US troops in Afghanistan via Central Asia – not only failed to stimulate improvements in cross-border efficiency but led to state-sponsored hikes in transit rates. Cooley has posited that the BRI could end up increasing cross-border transaction costs if Central Asian customs officials – who depend on the informal revenues accrued at border crossings – use the expected rise in traffic as an opportunity to hike road and rail rates.317
China’s BRI has given rise to a number of other concerns. These include the prospects of increased Chinese leverage over BRI partner countries, rising debt associated with investment financing, heightened anti-China sentiment, greater opportunities for graft, and the potential utilization of Central Asian states as resource extraction bases. Despite the many pitfalls, however, the authorities in Nur-Sultan have maintained that the BRI, which places Central Asia and Xinjiang at the centre of its land corridors, stands to solidify Kazakhstan’s status as a major transportation hub linking East and West. This would allow the economy to benefit from transit trade and easier access to goods in neighbouring countries.
The ‘Uzbekistan factor’ and enhanced prospects for intra-regional cooperation
The liberalization of Uzbekistan’s large market helps to smooth the way for the development of major transport, communications and energy projects in the region that fall under the BRI umbrella
Following the death in 2016 of Uzbekistan’s long-serving authoritarian ruler, Islam Karimov, the country’s new leader, Shavkat Mirziyoyev, began his presidency by declaring a thaw in relations with Uzbekistan’s immediate neighbours, resolving many border disputes, resuming inter-regional flights and easing restrictions at border crossings. Mirziyoyev broke with Karimov’s protectionist policies by abolishing import duties on more than 30 product groups, in an effort to depoliticize and ‘de-ideologize’ relations with neighbouring countries and increase their access to Uzbekistan’s market.
The liberalization of Uzbekistan’s large market not only helps to smooth the way for the development of major transport, communications and energy projects in the region that fall under the BRI umbrella; it has also boosted Central Asian intra-regional cooperation as a whole. In April 2019, officials from Kazakhstan and Uzbekistan signed a memorandum of understanding on the establishment of an international centre for trade and economic cooperation on their shared border, for the purpose of streamlining cross-border trade and creating a large trade and logistics hub for Central Asia. The new facility is expected to centralize trade interactions with the other Central Asian countries, consolidate and regulate trade flows, and improve transport logistics.318
Tashkent’s reforms also have the potential to further Nur-Sultan’s aspiration to become not only a leading Asian financial axis but also Central Asia’s main financial hub. Kazakhstan has been pushing hard to promote this goal, and on 5 July 2018 the Astana International Financial Centre (AIFC) was launched. The AIFC has been conceived as part of a plan to wean Kazakhstan’s economy from its dependence on oil and gas revenues, although it has yet to deliver significant results in this respect. Given that one of Kazakhstan’s goals is to stimulate investment and develop regional capital markets, its aim to become the chief banker for the entire region is closely linked to Uzbekistan’s economic prosperity.319
The strengthening of Kazakhstan’s ties with Uzbekistan, involving frequent talks between the two countries’ leaderships, has slowly kick-started regional cooperation as a whole. The shift in Uzbekistan’s regional policy, while still in the early stages, has improved dialogue among the Central Asian states and could gradually lead to a consensus regarding the benefits of increased trade and cooperation in key spheres. Such cooperation would potentially allow the states to formulate joint solutions to regional problems, such as water and energy issues, security concerns and drug-trafficking; to elaborate common positions on the policies of external powers, especially China and Russia; and, not least, to avoid being pushed ever further into the ‘raw materials peripheral zone of global economic processes’.320
In March 2018, in a clear manifestation of the strengthening of regional relations, leaders from the five Central Asian countries convened at the same table in Kazakhstan’s capital to discuss regional issues (Turkmenistan was represented by its parliamentary chair).321 The Astana summit marked the first time since 2009 that all five states had met to discuss greater cooperation as a region. Notably, no external hegemon was present. President Mirziyoyev had previously proposed the idea of an all-Central Asian summit in September 2017, although it was Nazarbayev who offered to host the first gathering in Astana on the eve of the Nowruz festival (celebrated on the vernal equinox), in part to avoid speculation that Uzbekistan might be attempting to regain its former status as regional hegemon.322
Previous attempts at regional cooperation have been overtaken by Russia, leaving Central Asia without its own coordinating body
Given that Russia has little interest in seeing successful intra-regional cooperation in Central Asia, the leaderships of both Kazakhstan and Uzbekistan were keen to stress at the outset of the summit that there would be no discussion of integration or institutionalization. Previous attempts at regional cooperation have been overtaken by Russia, leaving Central Asia without its own coordinating body: in 1994, a regional cooperation structure with an exclusively Central Asian membership, the Central Asian Union (CAU), was set up by Kazakhstan, Uzbekistan and Kyrgyzstan for the purpose of forming a common economic area. Tajikistan joined in 1998, while Turkmenistan consistently declined invitations to join. In 1998 the CAU was renamed the Central Asian Economic Union, and in 2001 it was rechristened again as the Central Asian Cooperation Organization (CACO).323 The CACO ceased to exist in 2005 after merging with the Russia-led Eurasian Economic Community (which later became the EAEU).
Some long-time observers of Central Asia have claimed that ‘so successful was the CAEU [sic] that Vladimir Putin asked to be admitted as an observer and then demanded that Russia be included as a member … Putin promptly dismissed the group and merged its members into what later became the Eurasian Economic Union’.324 While it is true that Russian designs for the CACO hastened its demise, it is far from the case that the Central Asian states actively resisted integration into the Eurasian Economic Community; rather, they allowed external powers to ‘divide and conquer’ the CACO, in part through their own inability to articulate common positions on the vast majority of issues. Not a single joint regional project, such as a common economic space or a long-discussed water and energy consortium, was successfully set in motion by the CACO. Indeed, the only concrete result of Central Asian cooperation throughout the entire period was the creation of a nuclear non-proliferation zone.
A major factor behind the ultimate demise of the CACO was Uzbekistan’s ‘beggar thy neighbour’ policies. Since 1999 Tashkent had enforced a rigorous visa regime, mined its border regions, expelled residents from border areas, unilaterally demarcated certain border territories and regularly cut off energy supplies to its neighbours. As a consequence, Kazakhstan, Tajikistan and Kyrgyzstan viewed regional groupings containing external actors – which provided a built-in counterweight to Uzbekistan – as more promising options to contain Uzbekistan. Since Karimov’s death in 2016, Uzbekistan’s volte-face towards its neighbours has changed that regional dynamic, potentially allowing the five states to elaborate policies for the region without the presence of an external actor.
At the end of the March 2018 summit, no communiqué or declaration was announced, primarily to avoid excessive attention from Russia.325 However, the five leaders did announce their intention to meet on an annual basis and to create a five-sided working commission at the level of deputy prime minister to support regional trade and agreements on water/energy issues.326 Since the landmark meeting in 2018, Kazakhstan has worked to introduce a Schengen-like single tourist visa for the region – known as the Silk Road Visa – to facilitate cross-border tourism. Kazakhstan and Uzbekistan are set to launch this common visa before the end of 2019, and authorities in Tajikistan and Kyrgyzstan have expressed interest in joining the project.
In an additional development, the inaugural session of the Central Asian Economic Forum was held in Tashkent in March 2019, at which it was declared that closer cooperation among Central Asian countries had resulted in increased trade turnover. Volumes remain modest: in 2018 Kazakhstan’s volume of annual trade with its Central Asian neighbours increased by 18.4 per cent over 2017 levels to $4.3 billion.327
Table 3: Kazakhstan’s trade with the Central Asian states, Russia and China as a percentage of its total foreign trade turnover ($)
2000 |
2005 |
2010 |
2015 |
2018 |
||||||
---|---|---|---|---|---|---|---|---|---|---|
Imports |
Exports |
Imports |
Exports |
Imports |
Exports |
Imports |
Exports |
Imports |
Exports |
|
World total ($ million) |
5,040 |
8,812 |
17,353 |
27,849 |
31,127 |
60,271 |
30,568 |
45,956 |
33,659 |
61,111 |
China |
3.00% |
7.65% |
7.20% |
8.70% |
12.73% |
16.79% |
16.64% |
11.92% |
16.00% |
10.32% |
Kyrgyz Republic |
0.60% |
0.66% |
0.68% |
0.81% |
0.53% |
0.70% |
0.60% |
1.13% |
0.72% |
1.07% |
Russian Federation |
48.40% |
19.87% |
37.98% |
10.51% |
39.38% |
9.48% |
34.45% |
9.90% |
39.33% |
8.64% |
Tajikistan |
0.09% |
0.60% |
0.10% |
0.54% |
0.05% |
0.43% |
0.54% |
0.91% |
0.94% |
0.86% |
Turkmenistan |
0.86% |
0.08% |
0.04% |
0.09% |
0.03% |
0.15% |
0.21% |
0.25% |
0.03% |
0.14% |
Uzbekistan |
1.40% |
1.51% |
1.50% |
0.85% |
1.52% |
1.82% |
2.37% |
2.05% |
3.43% |
2.68% |
Sources: Ministry of National Economy of the Republic of Kazakhstan – Committee on Statistics (2019), Внешняя торговля Республики Казахстан 2014-2018 [Foreign Trade of the Republic of Kazakhstan 2014–2018]; Ministry of National Economy of the Republic of Kazakhstan – Committee on Statistics (2015), Foreign Trade of the Republic of Kazakhstan 2010–2014: Statistical collection; Агентство Республики Казахстан по Статистике [Statistical Agency of the Republic of Kazakhstan] (2006), Социально-экономическое Развитие Республики Казахстан [Socio-economic Development of the Republic of Kazakhstan]; Агентство Республики Казахстан по Статистике [Statistical Agency of the Republic of Kazakhstan] (2006), Взаимная торговля стран-членов ЕврАзЭС в 2005 году [Mutual trade of EurAsEC member countries in 2005]; Агентство Республики Казахстан по Статистике [Statistical Agency of the Republic of Kazakhstan] (2002), Внешняя торговля и совместное предпринимательство Республики Казахстан [Foreign trade and joint ventures of the Republic of Kazakhstan]. All documents available at http://stat.gov.kz/edition/publication/month (accessed 7 Nov. 2019). See also Nadyrov, Sh. M. (2015), Торгово-экономические аспекты сотрудничества Казахстана и Узбекистана [Trade and economic aspects of the Kazakhstan-Uzbekistan cooperation], Sauran Information and Analytical Centre, 17 November 2015, http://cc-sauran.kz/rubriki/economika/141-kazakhstan-uzbekistan-invest.html#a (accessed 11 Nov. 2019); and Государственный комитет Туркменистана по статистике [Turkmenistan National Committee on Statistics] (2011), Внешняя торговля Туркменистана со странами мира в 2010 году [Turkmenistan’s external trade with other countries in 2010], cited in Jumayev, I. (2012), Внешняя торговля Туркменистана: тенденции, проблемы и перспективы [Turkmenistan’s external trade: trends, problems and perspectives], Report No. 11/2012, Bishkek: University of Central Asia, https://www.ucentralasia.org/Content/downloads/UCA-IPPA-WP11-Turkmenistan-Rus.pdf (accessed 11 Nov. 2019).
Kazakhstan used the Economic Forum to initiate the creation of the Council for the Development of Transport and Transit Corridors of Central and South Asia, an interstate advisory and coordinating body that is also to include representatives from Pakistan, India and Afghanistan. During Kazakhstan’s membership of the UN Security Council in 2017–18, it organized the first visit in seven years by Security Council members to Afghanistan. Yet while Kazakhstan’s official establishment regards support for Afghanistan as an important investment in regional stability, it does not regard that state as an integral part of the Central Asian region. The deputy director of the Institute for Strategic Studies under the President of the Republic of Kazakhstan, Dr Sanat Kushkumbayev, has stated: ‘Although we view Afghanistan as an important participant and observer in all regional political and economic processes, we speak with caution about Afghanistan as a part of our region, given that it has not evolved in step with us and has been heavily influenced by the South Asian model of development.’328
Table 4: Population figures for the Central Asian states, ‘000s
2000 |
2005 |
2010 |
2015 |
2018 |
|
---|---|---|---|---|---|
Kazakhstan |
14,884 |
15,147 |
16,322 |
17,543 |
18,276 |
Kyrgyz Republic |
4,898 |
5,163 |
5,448 |
5,957 |
6,316 |
Tajikistan |
6,216 |
6,789 |
7,527 |
8,454 |
9,101 |
Turkmenistan |
4,516 |
4,755 |
5,087 |
5,565 |
5,851 |
Uzbekistan |
24,650 |
26,167 |
28,562 |
31,299 |
32,955 |
Total |
55,165 |
58,021 |
62,947 |
68,818 |
72,499 |
Source: World Bank (undated), ‘Population, total – Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan’, https://data.worldbank.org/indicator/SP.POP.TOTL?locations=KZ-KG-TJ-TM-UZ (accessed 11 Nov. 2019).
Table 5: GDP per capita for the Central Asian states, $
2000 |
2005 |
2010 |
2015 |
2018 |
|
---|---|---|---|---|---|
Kazakhstan |
1,229 |
3,771 |
9,070 |
10,511 |
9,331 |
Kyrgyz Republic |
280 |
477 |
880 |
1,121 |
1,281 |
Tajikistan |
138 |
341 |
750 |
929 |
827 |
Turkmenistan |
643 |
1,704 |
4,439 |
6,433 |
6,967 |
Uzbekistan |
558 |
547 |
1,377 |
2,615 |
1,532 |
Source: World Bank (undated), ‘GDP per capita (current US$) – Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan, Turkmenistan’, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2018&locations=KZ-KG-TJ-UZ-TM&start=2000 (accessed 11 Nov. 2019).
Part two: The state of bilateral relations
Relations with Uzbekistan
Given Uzbekistan’s large consumer market and Kazakhstan’s own economic size, relations between the two countries are key to prospects for the region’s long-term growth and, indeed, determine the regional climate. By virtue of its position as Central Asia’s strategic heartland, its historic standing and its large population (accounting for more than 45 per cent of the five-country total), Uzbekistan was recognized during Soviet rule as Central Asia’s regional power. By many accounts it should have overtaken Kazakhstan in the post-Soviet era to become the region’s biggest economic success story. Under Karimov’s rule, however, Uzbekistan stuck to price supports long after Kazakhstan and Kyrgyzstan had abandoned them – with disastrous consequences for entrepreneurial activity. As things stand, Kazakhstan is the region’s undisputed economic leader: its nominal GDP is over three times greater than that of Uzbekistan, and accounts for almost two-thirds of the region’s total.329
Officials in Kazakhstan have stressed that Uzbekistan’s recent partial opening will foster healthy competition between the two states, particularly in developing the manufacturing sectors of the two countries.330 Rivalry between Uzbekistan and Kazakhstan exists, even if reports of such rivalry are often exaggerated. It is conceivable that sustained liberalization of Uzbekistan’s economy and a concomitant improvement in its business and investment climate could result in the diversion of some investments and market activity from Kazakhstan to Uzbekistan (despite Kazakhstan’s long-standing status as the region’s economic powerhouse). Moreover, Uzbekistan has the advantage of already having undergone a change of executive, while Kazakhstan’s power transition is only in the incipient stages; it remains unclear which developments await Kazakhstan once Nazarbayev – who still wields power as ‘Leader of the Nation’ (Elbasy) and lifelong chair of the government’s Security Council – leaves the scene permanently.
Especially at the time of the collapse of the USSR, the economies of the Central Asian states were more competitive than complementary, given that the five countries exported a relatively limited range of commodities and that there was substantial overlap between each state’s principal export commodities (gold, cotton, energy, etc.). However, the economic patterns are somewhat more diversified today. Kazakhstan and Uzbekistan have certain market complementarities: Kazakhstan supplies its southern neighbour with oil, flour and wheat; Uzbekistan supplies Kazakhstan with fertilizers, fruits and vegetables. Although Kazakhstan’s manufacturing base has slowly shrunk since the early 2000s, Uzbekistan’s has grown relative to the size of its economy during the same period.331 Kazakhstan could therefore be a key export market for Uzbekistan’s manufactured goods, which include agricultural and electronic equipment and automobiles.332
The two economies are also potentially complementary in terms of labour supply and demand: Kazakhstan has insufficient labour resources in particular regions and sectors, such as seasonal labour in agriculture; at the same time, workers from regions in Uzbekistan with labour surpluses are willing to travel abroad for temporary work.333 Uzbekistan has a far greater labour force at its disposal than does Kazakhstan: 19.4 million persons of working age in the former compared to 10.8 million in the latter, as of 1 January 2017. However, as a percentage of the total, the working-age population is virtually identical in each country: 60.0 per cent in Kazakhstan and 60.5 per cent in Uzbekistan; that said, Kazakhstan has a larger pension-age cohort in percentage terms.334 At present, migrants from Uzbekistan account for only 7.8 per cent of Kazakhstan’s officially registered labour force; however, as only 10–25 per cent of citizens from Uzbekistan coming to work in Kazakhstan are registered, the actual figure is much higher.335 By and large, labour migrants in Kazakhstan from Uzbekistan work in agriculture, construction and trade, and as domestic labourers, e.g. as nannies, cooks and cleaners.
The official visits of President Mirziyoyev to Kazakhstan in March and April 2017 and of President Nazarbayev to Uzbekistan in September of the same year opened new possibilities for cooperation. In May 2017, South Kazakhstan Province,336 which contains a large Uzbek diaspora337 and accounts for 30 per cent of bilateral trade, established 11 industrial zones for joint projects.338 Uzbekistan’s leadership, in particular, hopes to increase cooperation in the oil and gas sector. To this end, the two countries have agreed to build and commission by 2021 an oil pipeline between the cities of Shymkent in southern Kazakhstan and Jizzakh in central Uzbekistan; the pipeline is due to have an annual capacity of 5 million tonnes.339 In 2018, bilateral trade rose by more than 25 per cent to $2.5 billion; the Joint Inter-governmental Commission on bilateral cooperation has been tasked with increasing this to $5 billion by 2020.
Relations with Kyrgyzstan
Kazakhstan is Kyrgyzstan’s second-largest export market after Switzerland (where Kyrgyzstan sends its gold), and money from Kazakhstan has traditionally played a major role in Kyrgyzstan’s economy. In 2007, Kazakhstan-based bankers controlled up to 50 per cent of Kyrgyzstan’s banking sector, and Kazakhstan was Kyrgyzstan’s largest foreign direct investor.340 Despite these economic realities, Kyrgyzstan is sceptical about the prospects for Central Asian cooperation. It views neither Kazakhstan nor Uzbekistan as suitable candidates for regional leader, given that both economies are insufficiently diversified and remain reliant on natural resources.341 Moreover, a political clash in 2017 between Kazakhstan and Kyrgyzstan damaged the former’s image among citizens of Kyrgyzstan. Popular opinion in Kyrgyzstan has since turned towards favouring increased economic and cultural cooperation with Uzbekistan.342
The political clash was a result of events in September 2017, during the run-up to Kyrgyzstan’s presidential election, when Nazarbayev met in Astana with Omurbek Babanov, one of the leading candidates in the presidential race. Nazarbayev remarked: ‘I am not going to meddle in these matters … but I think that Kyrgyzstan needs a competent, young and experienced man like you.’343 Kyrgyzstan’s President Almazbek Atambayev, who openly supported his own candidate, Sooronbay Zheenbekov, reacted with a personal lambasting of Nazarbayev and his policies, noting the latter’s advanced age and criticizing Kazakhstan’s meagre state pensions and high tariffs (despite relatively high GDP).344 Officials in Astana called Atambayev’s inflammatory remarks ‘irresponsible and provocative in their essence’, while their counterparts in Bishkek accused Kazakhstan of attempting to influence the ‘choice of the people of Kyrgyzstan and interfering in the internal affairs of the Kyrgyz Republic’.345 Not long afterwards, Kazakhstan’s border authorities strengthened controls over flows of people and goods from Kyrgyzstan, creating bottlenecks of large numbers of cargo trucks, cars and travellers.
Two months later, in November 2017, Kyrgyzstan’s prime minister accused Kazakhstan of failing to implement the Commonwealth of Independent States (CIS) free-trade agreement. This prompted Kazakhstan’s prime minister to confirm his country’s obligations within the EAEU, noting that the increased inspection of vehicles at the border was intended to foil the smuggling of contraband from China and to avert the import of goods that did not meet regulations.346 Kyrgyzstan registered complaints with the World Trade Organization and the EAEU, but withdrew these in December 2017 after the signature by both sides of a 50-point roadmap regulating bilateral cooperation in transport, veterinary control, and customs and tax administration. This marked the formal end of the two-month mini-trade war.347
The closure of a border that was supposed to have been open by virtue of both states’ EAEU commitments merely underscored the ambiguous benefits of membership of that organization. Having joined the EAEU to avoid economic isolation, Kazakhstan then proceeded to demonstrate to its neighbour, via the temporary border controls, that membership provided no guarantees against an economic blockade. A rise in mutual trade had been anticipated following Kyrgyzstan’s accession to the EAEU; in the event, bilateral trade levels decreased, in part owing to the disruption of Kyrgyzstan’s trade with China and the concomitant loss of revenues from the re-export of Chinese goods. Prior to 2015, thousands of Central Asian households had received income from shuttle trade centred on the huge Kara Suu market in southern Kyrgyzstan and the Bishkek-based Dordoy market in the north (which served Kazakhstan), but both markets were wiped out by Kyrgyzstan’s entry into the EAEU.
The feud between the two states caught Kazakhstan’s leadership by surprise. It also served as a lesson, prompting Kazakhstan to review its ‘little brother’ policy towards Kyrgyzstan. Given the loss of Kyrgyzstan’s re-export market, in particular, officials in Kazakhstan have expressed regret at not having taken measures earlier to address Bishkek’s concerns, particularly to ensure goods access to the common market.348 Nonetheless, reports of problems at the Kazakhstan–Kyrgyzstan border, including bans and counter-bans, continued throughout 2019.349
Relations with Turkmenistan
In recent years Turkmenistan has stepped up its efforts to develop transport and energy projects with its Central Asian neighbours, appearing to understand that greater connectivity has the potential to ease its economic crisis without necessarily undermining its sovereignty.350 This in turn has benefited Kazakhstan. For example, the Kazakhstan–Turkmenistan–Iran railway, inaugurated in 2014, increases Kazakhstan’s attractiveness as a transit link along the New Eurasian Land Bridge Economic Corridor, which connects China and Europe via Kazakhstan and Russia. Kazakhstan’s border with Turkmenistan now provides a direct route to the Gulf region, and thus presents the authorities in Nur-Sultan with several new opportunities for economic diversification. The Turkmenistan–China gas pipeline has also enabled Kazakhstan to foster its ties with Turkmenistan, as the pipeline traverses both countries’ territory. Plans are also under way to route electricity from Turkmenistan via Uzbekistan’s power system to Kazakhstan and Kyrgyzstan.
During the state visit of Turkmenistan’s president, Gurbanguly Berdimuhamedow, to Kazakhstan in April 2017, the two countries signed a strategic partnership treaty and an agreement on border demarcation.351 However, since commodities dominate both countries’ exports, trade levels are low: Turkmenistan’s share of Kazakhstan’s foreign trade was a mere 0.1 per cent in 2018 (see Table 3).
Relations with Tajikistan
As with the other Central Asian states, Kazakhstan has declared its intention to increase its trade with Tajikistan.352 Economics aside, both countries have increasingly turned to repressive measures in recent years for the stated aim of fighting religious radicalism. In the case of Tajikistan, in 2015 authorities outlawed the Islamic Renaissance Party of Tajikistan (IRPT), which for years had acted as the principle force of political opposition to the regime of Emomali Rahmon, president of Tajikistan since 1992. The IRPT was declared a terrorist group in 2015, and its leaders were tried and imprisoned. In January 2018, Kazakhstan’s leadership proposed a bill that would give law enforcement and security bodies powers to monitor ‘suspicious’ citizens, proposing visual guidelines for the identification of radicals, such as beard styles or clothing that conceals the face. The draft law also sets out strict regulations for attaining a religious education abroad, tightens control over religious organizations’ finances and puts forward a definition of ‘destructive religious teaching’.353 Consequently, it came as no great surprise when Kazakhstan’s minister of religious affairs met with the chairman of Tajikistan’s religious affairs committee on the sidelines of the Astana summit in March 2018 to sign a memorandum on cooperation in countering religious extremism, citing the threat of Islamic State of Iraq and Syria (ISIS) militants returning to the region.354
Conclusion
Although still modest in relative terms, trade turnover between the Central Asian states in 2018 grew by 35 per cent on the previous year to $12.2 billion
Owing to the confluence of factors set out in this chapter, Kazakhstan has begun to identify itself more clearly as an integral part of Central Asia rather than as a mere intermediary between the other Central Asian states and Russia. The result has been a palpable and growing trend towards cooperation within the Central Asian region itself. Although still modest in relative terms, trade turnover between the Central Asian states in 2018 grew by 35 per cent on the previous year to $12.2 billion.355 At the outset of the historic five-state consultative meeting in Astana in March 2018 – the first to bring together the leaderships of all five Central Asian states in nearly a decade – President Nazarbayev declared: ‘In order to solve the problems of Central Asia, we do not need any third persons. We ourselves can resolve all questions, and that is why we are meeting.’356 With regard to the question of regional leadership, while Nazarbayev was seen as the undisputed elder statesman until his resignation in March 2019, Kazakhstan’s new president, Kassym-Jomart Tokayev, will certainly not have the same gravitas as that enjoyed by the country’s First President and official ‘Leader of the Nation’. In addition, it remains unclear to what extent Uzbekistan’s own relatively new president, Shavkat Mirziyoyev, will manage to raise his regional stature in the coming years.
As the need for more efficient mechanisms to improve intra-regional trade becomes increasingly evident, the Central Asian leaderships would benefit from adopting measures to boost border efficiency, in particular by tackling informal payments and other non-tariff barriers. Such policies could reinforce the potential gains to be achieved from projects such as the planned international centre for trade and economic cooperation on the Kazakhstan–Uzbekistan border. At the same time, if interactions between independent business and social networks in Kazakhstan and Uzbekistan were to develop significantly over a sustained period, informal regional cooperation could deepen from the ground up. It is precisely this form of informal or ‘soft’ regionalism – akin to the model adopted by the Association of Southeast Asian Nations – that is being advocated by a group of Kazakhstan’s leading political analysts. In particular, they argue that a focus on consensus-seeking and continuous consultation, rather than on formal integration and the creation of the structures associated with it, would allow Kazakhstan to develop Central Asian intra-regional cooperation, while at the same time continuing its participation in the process of Eurasian integration.357
Yet while Kazakhstan’s leadership welcomes increased trade prospects with the other Central Asian states, it is fully cognizant that its trade with those countries cannot begin to equal that with Russia, China and Europe. This automatically makes any development of trading links with Central Asia a far lesser priority. In addition, Kazakhstan continues to give greater importance to positioning itself as a global player than as a regional leader. Not least, the leadership transition following Nazarbayev’s resignation means that the country’s governing establishment will invariably remain preoccupied for the immediate future with domestic politics, social stability and the domestic economy.
Russia does not view the potential establishment of a regional cooperation entity with an exclusively Central Asian membership as in its own interests. Rather, it regards Central Asian unity as subordinate to greater Eurasian cooperation, as embodied in the Russian-led EAEU. Consequently, at present, both Kazakhstan and Uzbekistan aim to keep cooperation within Central Asia low-key and informal, lest any efforts be hijacked or thwarted by Russia. Moreover, if the Central Asian states were to enter into an exclusive, formal cooperation structure, Russia would be likely to ramp up the pressure on Uzbekistan and Tajikistan to join the EAEU (and, in the case of Uzbekistan, possibly the CSTO). This reflects Moscow’s long-running quest to cement the creation of its military, political and economic bloc with a ‘full set’ of Central Asian actors – isolationist Turkmenistan excepted. China, on the other hand, would likely only gain from closer cooperation among the Central Asian states, as this would facilitate the realization of its own infrastructure and investment projects under the BRI.
In three decades of waxing and waning relationships with the world’s largest powers, Kazakhstan’s leadership has witnessed efforts by China on an unprecedented scale to connect its own regions with Central Asia, Europe, the Middle East and South Asia; by Russia to spearhead new regional organizations in order to counter Western structures; and by the US to link Central Asia and South Asia along a ‘New Silk Road’. To varying degrees, each of these three external hegemons has promoted its own integration plan for Central Asia. As Kazakhstan begins its transition to a post-Nazarbayev era, the country is at last set to cooperate on a stronger footing with its Central Asian neighbours, even as its relations with major powers will remain its chief priority.