Kazakhstan, the largest and wealthiest country in Central Asia, is aiming to significantly increase its economic cooperation with the European Union. At the same time, a “contractual framework” with China and Uzbekistan to regulate usage of transboundary rivers seems to be one of Astana’s top priorities in the field of the economy.
But will those actions have an impact on the former Soviet republic’s ties with Russia?
According to Kazakhstan’s Ministry of Industry and Construction, the energy-rich nation produces 19 essential raw materials (beryllium, tantalum, titanium, ammonium metavanadate, copper, and phosphorus among them) included in the list of critical raw materials for the European Union. Given that Italy remains one of major importers of Kazakh raw materials – including crude oil that accounts for 97.4% of the total Kazakh exports to the south European country – it is not surprising that Kazakhstan’s President Kassym-Jomart Tokayev’s first foreign trip in 2024 was to Rome.
During his visit to Italy, Kazakhstan’s KazMunayGas (KMG) and Italian Eni have reportedly agreed to build a hybrid power station in Zhanaozen in western Kazakhstan with a total capacity of 247 megawatts (MW). But since Russian energy company Inter RAO is expected to start building three thermal power plants in the Kazakh cities of Kokshetau, Semey and Ust-Kamenogorsk, it is entirely possible that Astana, despite its ambitions to forge very close relations with Europe, will continue implementing its decades-old “multi-vector” foreign policy for as long as possible.
However, Kazakhstan has recently offered its Caspian Sea ports of Aktau and Kuryk, as well as 22 airports, to European, rather than Russian investors, which suggests that Astana, at least when it comes to economic policy, has started turning westward. Moreover, the Central Asian state’s officials frequently hold talks with the EU representatives aiming to simplify the visa application process for Kazakh citizens, while some political parties advocate Kazakhstan’s accession to the European Union.
On the other hand, according to the official statistics, the number of Kazakhs who moved to Russia in 2023 hit the record, since only 11,700 people migrated to the neighboring country. Moreover, out of 400,000 Russians who found safe haven in Kazakhstan following Moscow’s invasion of Ukraine in 2022, only 80,000 stayed in the Central Asian nation, which indicates that the old Soviet “Friendship of peoples” concept – at least when it comes to Russians and Kazakhs – is gone forever.
But in spite of that, Kazakhstan continues developing economic relations with the Russian Federation as a country, as well as with its subjects. For instance, the trade turnover between Kazakhstan and Russia’s republic of Bashkortostan exceeded $350 million in 2023, while in 2022 the trade between the Central Asian state and Russia’s Tatarstan region exceeded $597.
But what Kazakh authorities also seem to be focused on is their country’s participation in the development of the Middle Corridor, also known as the Trans-Caspian International Transportation Route (TITR) – starting from Southeast Asia and China, running through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia – a rout that is seen as an alternative to reach European and international markets and bypass Russia. If Astana manages to achieve its ambitious goals, and increase the volume of oil supplies along the Middle Corridor, the energy cooperation between Kazakhstan and European countries will notably grow.
At this point, however, Kazakhstan’s main export route remains the Caspian Pipeline Consortium (CPC) which supplies oil to the global market via a Russian Black Sea terminal Novorossiysk. But after Belarus, another transit country, decided to increase raises for transit shipments of oil through its territory, Astana will unquestionably continue to actively seek to develop alternative routes, given that its economic growth is largely driven by oil and gas revenues.
For the new Kazakh government, formed on February 6, attracting investments, as well as “digital nomads”, will be one of the major economic goals. As Tokayev recently stated, the former Soviet republic should soon prepare a decree on economic liberalization, which should focus on three areas – market competition, effective privatization, and reform of the public sector. In this process, the EU, rather than Russia and China, will be Kazakhstan’s major partner, although Astana will almost certainly aim to preserve relatively good ties with Moscow and Beijing.
In 2023, Kazakhstan was China’s largest trade partner in Central Asia. Bilateral trade between the two neighboring nations reached $41 billion, which is an increase of 32 percent compared to the previous year. The fact that Chinese President Xi Jinping recently told his Russian counterpart Vladimir Putin that Beijing and Moscow “should support Kazakhstan in hosting the Shanghai Cooperation Organization (SCO) summit this year”, perfectly illustrates that the energy-rich Central Asian nation has a special place in China’s foreign policy.
Thus, although Kazakhstan’s new government is expected to bolster cooperation with the West, it cannot ignore geography. For the foreseeable future China and Russia – as the former Soviet republic’s giant neighbors – will undoubtedly remain Astana’s major political and economic partners.
Image: Vyacheslav Bukharov
