KAZAKHSTAN BALANCE SHEET: 20 YEARS OF INDEPENDENCE BRING GAINS AND UNCERTAINTIES

By Richard Weitz (02/22/2012 issue of the CACI Analyst)

From the vantage point of 1991, Kazakhstan has to have made the most unexpected progress of any of the former Soviet Republics. The country has achieved the most dynamic economy, its diplomacy has managed to not only balance but also co-opt nearby great powers, and the country looks free from major external or even internal security threats. The main uncertainties relate to how the country will manage its looming presidential succession and whether Kazakhstan will follow other strong national economies and develop a more pluralistic political system.

BACKGROUND: Kazakhstan initial progress was concentrated in the realm of nuclear nonproliferation. Nursultan Nazarbayev, who has been Kazakhstan’s only president since its independence, made eliminating the arsenal of nuclear weapons Kazakhstan inherited from the Soviet breakup a priority. Working with Russia and the United States, Kazakhstani officials eliminated or transferred to the Russian Federation all the nuclear weapons left on their soil following the Soviet Union’s disintegration. This denuclearization process included the elimination of some 1,300 nuclear warheads as well as various delivery vehicles and nuclear weapons-related equipment. They also closed the Soviet-era nuclear weapons test site at Semipalatinsk, the site of hundreds of nuclear detonations that have inflicted severe costs on the surrounding environment and people.

Kazakhstan’s non-nuclear energy production soon became the most important factor bolstering the country’s economic importance. Kazakhstan is the largest oil and natural gas producer in Central Asia and ranks 11th in the world in terms of proven hydrocarbon reserves, with more than three percent of the global total. Kazakhstan has managed to produce and export more energy over time. It has also succeeded in partially diversifying its energy customers and export routes, with significant flows of oil and gas heading to west to Europe and east to China as well as northward through Russia.

Thanks to its energy resources, Kazakhstan has obtained the largest economy in Central Asia, with a Gross Domestic Product (GDP) exceeding the combined total of its four Central Asian neighbors. Per capita annual GDP, only US$ 2,000 less than a decade ago, already exceeds US$ 11,000, on par with that in Russia, and continues to rise. The growing wealth has been widely shared and has led to the emergence of a large middle class as well as improved public infrastructure and better schools.

Almost since Kazakhstan gained independence in 1991, Nazarbayev has been driving regional integration efforts in Eurasia. In support of greater integration within the former Soviet Union and beyond, Kazakhstan has supported several initiatives: the Commonwealth of Independent States, Eurasian Economic Community, Collective Security Treaty Organization, Russia-Belarus-Kazakhstan Customs Union, and most recently a Eurasian Union proposed by Russian Prime Minister Vladimir Putin. Kazakhstan has also sought to reach out to NATO and the EU.

Kazakhstan’s global stature has risen due to its growing economy and skillful diplomacy. The country has remained committed to a “multi-vector” foreign policy that seeks to maintain good relations with Russia, China, Japan, the United States, and the European Union as well as other countries with important economic, political, or other roles in Eurasia.

The December 2007 OSCE Ministerial Council decision to award Kazakhstan chairmanship of the OSCE in 2010 marked recognition of the country's growing importance in Eurasia. Kazakhstan has become the first CIS and primarily Asian country to receive the chairmanship. Kazakhstani officials characterized their achieving this long-sought status as an endorsement of their country's successful economic and political reforms, their leading role in Europe and Central Asia, and their contribution as a bridge between the former Soviet republics and other OSCE members.

IMPLICATIONS: Despite a balance sheet of remarkable achievements in the face of major obstacles, Kazakhstan still faces security, economic, and especially political challenges today that could easily become more serious in coming years.

Kazakhstan’s economic and diplomatic influence has been limited by the inability of the countries of the region to cooperate well with one another. These states share unresolved disputes over borders, trade, visas, transportation, illegal migration, and natural resources such as water and gas. The poor state of their mutual relations has meant that these countries regularly enjoy closer ties with external actors (through bilateral and multilateral mechanisms) than with each other.

Kazakhstan itself does not face major imminent external or internal security threats. The country enjoys good relations with its neighbors due to its “multi-vector” foreign policy, No major terrorist group operates in Kazakhstan. Although there have been some terrorist bombings in the past year, they have been isolated and resulted in few casualties. But the constraints on regional integration have also impeded Kazakhstan’s ability to enhance the security of Afghanistan, which could eventually generate more direct threats to Kazakhstan.

Energy would appear less of a problem. Kazakhstan is expected to contribute one of the largest increases in non-OPEC supply to the global market in the next 10-15 years as its oil production doubles. In addition, the government is wisely striving to diversify the national economy to avoid over-dependence on natural resources exports. It is working to attract advanced technologies and modern management practices into priority economic sectors, which range from financial services to agriculture.

One reason why Kazakhstan, despite its small population and remote location from the world’s major economic and political centers of influence, has been able to exercise considerable influence in global affairs is that it attracts enormous foreign investment. But the recent violence in Zhanaozen have rattled some foreign investors, adding to longer standing commercial concerns as well as worries about the uncertain political succession process as Kazakhstan transitions to a new, post-Soviet generation of leaders.

The main ballast holding back Kazakhstan’s rising global influence has been Western criticism of its failure to adopt liberal democratic rights and freedoms. Western governments hoped that awarding the OSCE chairmanship to Kazakhstan would bolster the organization's influence in the former Soviet bloc as well as promote a greater commitment among these countries to all three OSCE policy pillars, including the commitment to democracy and human rights. In their pursuit of the OSCE chairmanship, Kazakhstani officials pledged to improve their country's civil rights and political liberties as well as subject Kazakhstan's domestic development to greater international monitoring. Even so, some observers complain that Kazakhstan's basic civil rights policies have not improved since 2007. 

CONCLUSIONS: Kazakhstan has made the difficult transition from a planned to a market economy, and from a second-level republic of the Moscow-dominated Soviet Union to a fully independent state able to exert considerable influence within Central Asia and sometimes beyond. The remaining transition, from a one-party dominated authoritarian country to a liberal democratic state in which multiple parties compete and win elections might not occur until President Nazarbayev, widely respected both at home and abroad, leaves the scene. The departure of the only president Kazakhstan has known since independence should open up the political environment to further transformation, though whether this actually occurs, how rapidly, and in which direction is unclear.

AUTHOR’S BIO: Dr. Richard Weitz is a Senior Fellow and Associate Director of the Center for Future Security Strategies at the Hudson Institute.