Wednesday, 27 November 2013

Russia and Kazakhstan Clinch “Alliance for the 21 Century”

Published in Field Reports

By Georgiy Voloshin (the 27/11/2013 issue of the CACI Analyst)

On November 11, the presidents of Russia and Kazakhstan, Vladimir Putin and Nursultan Nazarbayev, met in the Russian city of Yekaterinburg within the framework of the Tenth Regional Cooperation Forum. This bilateral structure aims to develop closer economic and trade relations between Russia’s and Kazakhstan’s border regions, especially in the context of growing integration ties between the two countries. While the general state of Russian-Kazakhstani partnership was the major topic of official discussions, this gathering enabled the signing of a new bilateral treaty known as the Treaty for good-neighborliness and alliance in the 21 century.

Based on an earlier agreement signed in May 1992 in the wake of the collapse of the Soviet Union, this treaty reaffirms Russia’s and Kazakhstan’s desire to foster relations “built on mutual trust, strategic partnership and comprehensive cooperation” (article 1). Upon recognizing their mutual respect for state sovereignty and territorial integrity (article 2), the two sides state their intention to avoid participation in any blocs and alliances directed against either of them. They also pledge their commitment to coordinate their foreign policy initiatives (article 3).

With the bulk of subsequent articles concerning various bilateral partnerships in fields as diverse as oil and gas, atomic energy, trade, cultural and scientific cooperation, article 10 of the new agreement specifically mentions the Customs Union and the Common Economic Space formed respectively in July 2010 and January 2012. Russia and Kazakhstan thus promise to strengthen these two structures “for the purpose of deepening Eurasian integration based on the principles of equality, voluntariness and mutual benefit without infringement upon political sovereignty.”

Russia and Kazakhstan also used the Yekaterinburg forum to conclude several sectoral agreements, such as the Roadmap for increased industrial cooperation in 2013-2014, a memorandum of understanding between their respective Industry Ministries foreseeing the expansion of their joint projects as well as a large gas contract. Overall, the two countries remain strategic political and economic partners. While their trade turnover grew fourfold within the last ten years to reach some US$ 23.8 billion in January-December 2012, cross-border ties still account for over 70 percent of this figure. Kazakhstan currently trades with almost 80 Russian regions on the basis of some 200 interregional cooperation agreements, with the number of joint-ventures having recently surpassed 5,000.

Together with Belarus, Moscow and Astana expect to become the founders of the Eurasian Economic Union, an EU-styled economic integration organization endowed with powerful supranational institutions and common legislation. Whereas the establishment of this bloc is expected no later than January 2015, its founding treaty is to be submitted for signing by the three presidents as early as next May. Despite Kazakhstan’s and Belarus’s objections, Russia also expects to promote political integration, with its high-level officials repetitively declaring that a common legislature would eventually be set up, after the Eurasian Economic Commission already assumed the responsibilities of a shared executive body.

However, differences among the three partners remain and are further likely to grow, as Russia’s role in their joint integration projects is becoming increasingly predominant. Earlier on October 24 and 25, Putin, Nazarbayev and Lukashenka met in Minsk to discuss the launch of the Eurasian Union. On this occasion, Kazakhstan’s president accused Moscow of practicing discriminatory measures, first and foremost non-tariff barriers, against his country’s producers. Contrary to the Russian Statistics Agency, Kazakhstani authorities had previously reported a sharp decrease in exports towards Russia and the rapidly increasing inflow of Russian goods. Moreover, Nazarbayev said that the Eurasian Economic Commission lacked impartiality, as it purportedly sought greater decision-making powers while taking direct orders from the Kremlin.

This criticism notwithstanding, it was Nazarbayev himself who suggested dismantling the Eurasian Economic Community (EurAsEc), a trade bloc created back in 2000 to promote economic cooperation in the post-Soviet space. According to Nazarbayev, the Eurasian Union is due to become the core integration framework with a potential to not only include Kazakhstan’s southern neighbors, Kyrgyzstan and Tajikistan, but also to attract new members, such as Turkey. Putin’s vision sounded more cautious: as Eurasian integration is still at its early stages, the EurAsEc would still be useful to maintain close multilateral ties with other post-Soviet states whose economies are not strong enough to integrate into the Customs Union any time soon.

At present, Russia and Kazakhstan will attempt to consolidate their integration achievements, paving the way for the Eurasian Union. Despite his country’s diminished weight in the Customs Union, President Nazarbayev is unlikely to change course and seems intent to continue to lend his support to this ambitious initiative. However, Moscow will have to make concessions to both Astana and Minsk to secure their continued loyalty and to make their trilateral partnership look more like a mutually beneficial undertaking than a purely political alliance entirely dominated by the Kremlin. 

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