International policymakers can rarely afford to place a high priority on Central Asia. The region does not fit comfortably in Europe or the Middle East, much less the Asia Pacific region forming the centerpiece of the US ‘pivot to Asia.’ Nevertheless, Kazakhstan presents an interesting avenue for the world to engage more closely with Central Asia. This article will introduce Kazakhstan and its regional interests against the backdrop of traditional Russian influence and emerging Chinese interests in Central Asia. It will then discuss parallel opportunities that exist in the Australia-Kazakhstan relationship, before suggesting methods of building ties that could lead to an expanding cooperative relationship between both countries in the near future.
Kazakhstan: Between Two Powers
Central Asia is often portrayed as a victim of its own geography. Caught between China to the east and Russia to the north, regional governments are seen engaging cautiously with both Beijing and Moscow on matters of security and economic cooperation, anxious not to discourage Chinese investors or provoke Russian policymakers. There are regular assertions that this landlocked region is the unwilling host of a ‘great game’ of geopolitics. However, as the largest state in the region and a founding member of two major multilateral regional bodies, the Eurasian Economic Union (EEU) and the Shanghai Cooperation Organisation (SCO), Kazakhstan poses a multifaceted challenge to this single-track view of the region.
Kazakhstan, the world’s largest landlocked country and home to over seventeen million people from dozens of ethnic backgrounds, became formally independent from the USSR in 1991. After nearly twenty-five years in office, and now in his fifth term, President Nursultan Nazarbayev continues to enjoy widespread popularity in Kazakhstan, despite international scrutiny over his electoral victories and the absence of any meaningful opposition.
Since independence, Kazakhstan has become the wealthiest state in Central Asia, experiencing a dramatic increase in GDP per capita between 1991 and 2013. The main driver of this increase has been strong international demand for Kazakhstan’s plentiful energy and mineral reserves. Kazakhstan depends heavily on European appetites for its oil, which account for 76 per cent of its oil export market. Kazakhstan is also the conduit for Central Asia’s gas pipelines, connecting both Turkmenistan and Uzbekistan to China, and sending gas from the Caspian Sea to Russia. While this strong demand for energy has granted relative prosperity to Kazakhstan, it has also brought Kazakhstan to the forefront of policymaking for two major powers that will arguably shape the future of Central Asia for the next several decades: Russia and China.
A Soviet Reunion: Kazakh Oil and Russian Money
Russia’s involvement in Kazakhstan has a long history. Kazakh territory first came under Russian control during the Tsarist rule of the Russian Empire in the mid-nineteenth century. After the Russian Civil War ended in 1922, Kazakhstan spent most of the twentieth century as part of the USSR. Russian was promoted as the official language of the Soviet state and Kazakh traditions were consequently suppressed. Additionally, traditional nomadic pastures were forcibly cleared to make way for collective farms and nuclear test sites such as Semipalatinsk. As the centrally-planned Soviet economy quickly deteriorated in the early 1990s, the republics of the USSR began declaring their independence; Kazakhstan, with Nazarbayev at the helm, followed suit in December 1991.
However, after seven decades as constituent republics of the same state, Kazakh independence unsurprisingly did not put an end to Russia’s influence in Kazakhstan. Firstly, economic ties between Kazakhstan and Russia remain strong at the local level. Most Russian oblasts (administrative divisions at the provincial level) maintain economic relationships with their counterparts in Kazakhstan, with four of these oblasts reporting trade worth over $1 billion annually with their southern neighbour. Russian state-owned energy firms, including Gazprom, also have significant investments in Kazakh oil and gas fields and their heavy involvement is an incentive for Astana to take Moscow’s policy preferences seriously, thus securing Russian influence in these lucrative industries.
Secondly, economic ties between Kazakhstan and Russia are a priority at the national level, though Astana does not necessarily tow every line that Moscow draws. The Eurasian Economic Union (EEU), an economic counterweight to the European Union, came into force on 1 January 2015. Its members include Russia, Kazakhstan, Armenia, Belarus, and Kyrgyzstan, and it demonstrates the importance that Kazakhstan, Russia and other Central Asian states place on intra-regional trade. According to Kazakhstan’s Ministry of Foreign Affairs, it was Nazarbayev who initially proposed a ‘Eurasian Union’ during a speech at Moscow University in the early years of Kazakh independence. In its modern form, the EEU is intended to function as a unified trade bloc with fewer restrictions on goods, labour and capital than previously existed among member states. In practice, however, Kazakhstan has acted independently from Russia, the de facto decision-maker in the EEU. Astana has neglected to impose Russian-style trade sanctions against the EU, the US, Norway, Canada and Australia in the wake of the Ukraine crisis, setting a challenging precedent for an organisation seeking a standardised trade regime.
Finally, Kazakhstan and Russia are necessarily connected by their shared cultural and political history. Ethnic Russians continue to make up a sizeable minority in Kazakhstan, particularly in the north, and the Russian language, despite indications of a gradual setback, continues to dominate in business and regional dialogues. The machinery of the Kazakh government has largely been inherited from the USSR, its senior bureaucrats were educated at Soviet institutions, and many of its politicians (Nazarbayev included) began their public careers under Soviet rule. Observers could be forgiven for thinking that a preference for proximity to Russia is a forgone conclusion for Kazakhstan.
Enter The Dragon: China and Central Asia
China’s interest in Kazakhstan is nothing new. China National Petroleum Corporation (CNPC), a state-owned oil and gas firm and the largest energy company in China, signed a $9 billion deal with Kazakhstan as early as 1997 to develop oil and gas fields in the northwest of the country. More recently, Chinese President Xi Jinping announced the ‘Silk Road Economic Belt’ during a visit to Kazakhstan in 2013, adding to a series of Chinese initiatives geared to develop road links, rail connectivity and energy pipelines in the region. Kazakhstan, at a crossroads between resource-rich Central Asian states and both China and Russia, potentially has the most to gain from such initiatives. While observers are often quick to assign the profit motive to Chinese activities in Kazakhstan, both countries have significant strategic reasons to develop stronger ties.
Of particular interest is security. China views its economic strategy in Central Asia through the lens of the Shanghai Cooperation Organisation (SCO), a multilateral body focused on preventing separatism, terrorism, and extremism, which it founded with both Kazakhstan and Russia. An open trade corridor with Kazakhstan and Central Asia more broadly could stimulate the kind of economic development in Xinjiang that would defuse any sentiments for political change in the province; an ongoing concern in Beijing. The SCO also provides Kazakhstan with an assurance that China will discourage any interventionist Russian activities in countries that are increasingly important to its own growth, for China does not want a Ukraine-style crisis on the border of its most restive province.
Another shared interest, as with Russia, is energy. China is actively pursuing a policy of energy diversification, partly for the prosperity benefits to provinces like Xinjiang. This is also to reduce dependency on sources arriving via China’s eastern seaboard; any interruption of the energy supply due to escalated tensions in the South China Sea, for example, would be unacceptable to Beijing. Coal imports are already decreasing, and the impetus to resolve pollution problems in China’s major cities has been strong enough to prompt a serious commitment to cleaner energy. Kazakhstan offers overland access to Turkmen and Uzbek gas fields, which allows China to pursue both of these objectives simultaneously while making inroads, quite literally, for its exports to Central Asian markets. In short, Kazakhstan and China have strong economic and security incentives to increase their cooperation, regardless of traditional Russian influence in Central Asia.
Australia and Kazakhstan: A Few Steppes Closer?
Australia’s international interests in Kazakhstan may seem unclear at first glance, particularly against the weight of Russian and Chinese influence in Central Asia. Kazakhstan is far from Australia’s traditional sphere of concern; bilateral trade and investment was worth a mere $168 million in 2014, and Central Asia is unlikely to match the strategic importance of the Asia Pacific in the near future. But recent developments in both countries shed some light on how Canberra can engage more effectively with Central Asia in general and Kazakhstan in particular.
Primarily, Australia and Kazakhstan share in common resource-driven economies with major agricultural components. This may indicate the potential for professional links at a people-to-people level, particularly where cultural and economic ties are limited. In addition, Kazakhstan is continuing to support initiatives that diversify its economy away from overreliance on oil and gas exports, including the import of Australian cattle. This is an area on which Australia could keep a close eye, in order to develop its trade with Kazakhstan and possibly other Central Asian states in light of the federal government’s ‘Economic Diplomacy’ initiative.
In addition, Kazakhstan’s diplomatic presence in Australia is growing. The two countries have maintained diplomatic relations since the latter became independent in 1991, and Astana has appointed two Honorary Consuls in Perth and Melbourne within the last five years – a management consultant and mining executive, and an agribusiness entrepreneur, respectively. Kazakhstan is also re-establishing a Consulate-General in Sydney, suggesting a gradual move to closer ties.
Lastly, opportunities for cooperation between Australia and Kazakhstan extend beyond the economic sphere. Kazakhstan regularly sends students abroad on the state-sponsored Bolashak scholarship. Therefore, the New Colombo Plan may be an opportunity for the Australian government to achieve a measure of ‘brand equality’ by partnering with institutions in Kazakhstan to provide students with academic experiences in Central Asia. Furthermore, in a positive step toward a more open tourism market, Australia has been added to a list of countries now eligible for visa-free travel in Kazakhstan. As such, Canberra is now in a position to enter into a wide-ranging dialogue with Astana on mutual economic, diplomatic, tourist, and educational interests.
Kazakhstan is unlikely to disrupt the Australian focus on markets like the US, China or Japan. Indeed, Canberra is similarly unlikely to draw Astana’s attention away from local concerns; there is no known succession plan to manage a transition when President Nazarbayev leaves office, for instance. But despite a limited appetite for a greater Australian presence in the region, any pivot to Asia should take its geographical centre into account. To paraphrase, if Russia and China are indeed moving toward another “great game” in Central Asia, they are playing by decidedly different rules; China is playing Monopoly while Russia is playing Risk. Australia could be well positioned in the next several years to play a more strategic hand in Central Asia, and Kazakhstan could be the ideal place to begin.
Luke completed a Bachelor of Languages (2012) and a Bachelor of Arts, Hons. (2013), specialising in Asian languages and political violence in Indonesia. Luke is an intern with the Consulate of Kazakhstan in Melbourne and works full-time in the finance sector.
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