A recent Financial Times article that highlighted a leaked confidential report about Russia’s attempts “to draw former Soviet nations closer into its orbit” – presented by Russian Prime Minister Mikhail Mishustin to a group of experts in 2024 – raises the question of whether Russia’s economic ties to some of its closest traditional allies, ex-Soviet Central Asian countries, have deteriorated since Russia’s invasion of Ukraine in February 2022. In this article, we look at one of Russia’s most significant partners in the region – Kazakhstan.
Almost a third the size of the US, Kazakhstan is the world’s largest land-locked country. It spans the steppes of Asia and Eastern Europe and its immediate superpower neighbors, Russia and China, exert strong influences on its political and economic trajectory. Further afield, other powers – including those in Western Europe, Japan, and, to an extent, the US – are making a play for strengthening their economic ties with Kazakhstan.
Kazakhstan’s incredible wealth of natural resources, such as uranium, oil and gas, coal and ferrous metals, as well as its significant wheat output, make it a desirable partner – as does its strategic location, especially now that most trade routes attempt to bypass Russia and Ukraine. In the 19th century, the “Great Game,” aptly named by British intelligence officer Captain Arthur Conolly and popularized by Rudyard Kipling, was the name given to the rivalry between the British and Russian empires competing for influence over Central Asia. In the 20th century, the term was used to refer to the tensions between the Soviet Union and the US over Afghanistan. Today, it is Kazakhstan, and to an extent its smaller neighbors, that have become the subject of a 21st century Great Game, as other powers attempt to build allegiances in this strategic part of the world. But to whose advances is Kazakhstan most attracted? And how do the sanctions targeting Russia affect its international economic strategy?
After the fall of the USSR, this former Soviet republic maintained a close, sometimes turbulent, relationship with the Kremlin. As part of the Eurasian Economic Union – alongside Russia, Belarus, Armenia and Kyrgyzstan – Kazakhstan has, in recent years, traded oil and gas with Moscow at below market prices while enjoying significant investment from major Russian companies such as Gazprom.
In early 2022, civil unrest demanding political reforms and government change shook Kazakhstan. The Russia-led regional Collective Security Treaty Organization sent preventative military assistance to bolster support for the Kazakh president, Kassym-Jomart Tokayev. The situation was resolved with no shots fired and the offer of military assistance became moot. Yet, this was a symbolic moment for both neighbors – Russia looked as if it could be called upon as an arbitrator in Kazakhstan’s moment of crisis, while Tokayev was perceived as capable of resolving problems and re-enforcing his political standing without blood being spilt, albeit while being able to call upon Russian support.
More importantly, Astana wanted to demonstrate that even though it could call on Moscow for help, it did not depend on it to resolve internal crises. Since February 2022, Russia’s role as a potential guarantor of security in Kazakhstan has diminished. Kazakhstan now has a stronger impetus to pursue what it describes a multi-vector approach to foreign policy, whereby the country’s economic and political relations are diversified, not dependent on any one country. China’s support, and booming bilateral trade, has given Kazakhstan a degree of confidence that Russia’s geopolitical ambitions in Central Asia will be contained.
For China, neighboring Kazakhstan is an important access route to Europe, which explains why the Belt and Road Initiative (BRI), a Chinese state project to build global infrastructure, is forging road and rail routes through Kazakhstan. The Chinese have been eagerly investing in the Kazakh energy sector, crypto mining, and general trading. With closer economic ties, however, comes the risk of Chinese influence over Kazakh foreign and domestic policy. The power imbalance between mighty China and aspirational Kazakhstan is met with concern and cultural resistance by the Kazakh people. To counterbalance this tension, the Kazakh state has undertaken its own USD 9 billion national project – known as Nurly Zhol or “Bright Path” – to renew its transportation and logistics infrastructure. Kazakhstan also has been leading the development of the EU-supported “Middle Corridor,” the Trans-Caspian International Transport Route, which bypasses Russia altogether. The booming construction of transportation infrastructure, along with Kazakhstan’s natural resources, has already piqued the interest of the new US administration. Though keen to establish permanent trade relations with Kazakhstan and other Central Asian countries, the US must overcome the Jackson-Vanik Amendment, a US law passed in 1974 to restrict trade with Soviet Bloc countries.
All this attention on Kazakhstan should allow it to scale up its foreign trade and assert its independence from its powerful neighbors. Indeed, despite being heavily involved in the transit of Russian oil, and Russia’s biggest Eurasian Economic Union trading partner, Kazakhstan has taken a cautiously brave stand on the war in Ukraine, abstaining from condemning it in the 2022 UN General Assembly vote but declaring on a diplomatic level that Kazakhstan is making an effort “to ensure that its territory is not used to circumvent or undermine European and international sanctions” against Russia.
This pledge, albeit difficult to uphold, has not gone unnoticed by countries who want to avoid trading or logistical touchpoints with Russia. Kazakhstan’s energy and mineral resources, paired with its location, will play a key part in this development. Improvements to the Middle Corridor will also bolster general trade between the EU and Kazakhstan, Central Asia, and China.
The Great Game in Central Asia is once again at the heart of geopolitics – and this time Kazakhstan is at its epicenter. Caught in the middle, it is now presented with the opportunity to partner with interested parties while strengthening its economy and reinforcing its political independence. With billions of dollars of investment coming into the country, a closer scrutiny of potential risks – political, corruption or sanctions-related – will be key to operating successfully in Kazakhstan and in the region at large.
