Kazakhstan’s move toward China follows frustration with West

February 25. Central Asia Newswire

By Martin Sieff

Kazakhstan's move toward China follows frustration with WestDisillusion with the U.S. and Britain, and inadequate investment potential from Russia and Europe lie behind the latest Kazakh tilt towards China.

Although largely ignored in the Western media, the visit of Kazakhstan President Nursultan Nazarbayev to China this week marked a dramatic new stage in the relationship between the two nations. As documented in an earlier Central Asia Newswire (CAN) analysis, Nazarbayev and President Hu Jintao of China took pains to describe their relationship as a “strategic partnership” in their joint communique on the visit.

Indeed, China has now moved to a second stage of investment in the Kazakh economy. China’s giant state-owned-corporations continue to make multi-billion dollar deals with their Kazakh counterparts. But now much smaller Chinese companies are, with full government support, also making their own investment deals with intermediate-level Kazakh companies to develop the energy wealth of the Caspian Basin and advance Kazakhstan’s 2030 industrial development strategy.

But beyond Chinese investment alone, Kazakhstan’s dealings with other nations are also pushing it closer to China.

First, the Kazakhs are increasingly disillusioned with their old financial ties to Britain.

Kazakhstan’s policymakers and top bankers still speak bitterly of the failure of London money managers to anticipate the financial crisis of early 2009 or to insulate Kazakh companies from it who were doing business on the London Stock Exchange.

Kazakh efforts to build U.S. ties have not been returned by the U.S. with equal enthusiasm. The high hopes of a closer strategic partnership that flourished after President Barack Obama was elected, and during the April 2010 international nuclear summit in Washington, have long since faded.

U.S. diplomats, including Secretary of State Hillary Clinton, continue to lecture Kazakhstan on human rights and the promotion of democracy. This is despite the fact that Kazakhstan has a better record on democracy than its neighbors – except newly democratic Kyrgyzstan – and a better record on respecting human rights than other nations across the Eurasian heartland.

The U.S. pursuit of what many Asian and European leaders regard as irresponsible, potentially inflationary policies by the Obama administration can also be seen as alarming to Kazakhstan.

Closer relations with China are a welcome contrast to the economic and social frustrations Kazakhstan has felt in dealing with London and Washington in recent years. Kazakhstan also realizes that under current economic conditions, China has vastly more investment capital – and a greater willingness to invest it in Kazakhstan – than many of its Western partners.

Kazakhstan’s deepening relations with Russia are also complimented by closer ties to China.

Russia remains Kazakhstan’s main strategic partner and protector. And bilateral economic ties are growing even stronger now due to Kazakhstan’s membership in the new customs union with Russia and Belarus. The customs union has already proven to be good business for Kazakhstan as it has allowed Kazakhstan to raise up to $2 billion per year in additional revenue from oil export tariffs imposed in coordination with Russia.

However, Kazakhstan cannot get the business, investment or industrial know-how in advanced technologies that it needs from Russia. Other European and East Asian nations have the ability to provide that sort of know-how. But China remains the biggest supplier of that expertise, just as it remains the biggest customer for Kazakhstan’s oil, natural gas and uranium.

And Kazakhstan’s relationship with the Middle East is also important to the country. But Iran and the Arab world are currently being swept by a tidal wave of protests that have already toppled the governments of Egypt and Tunisia and are now shaking Libya, Yemen and Iran. And though there have been calls for increased democracy in China, that country remains a stronger, more stable and more predictable regional partner for Central Asia than the Middle East. And it does not carry the risk of extreme Islamist revolutionary movements.

Kazakhstan has no plans to abandon its practice of establishing diverse international partnerships.

But the scale of the agreements reached during Nazarbayev’s visit to China this week confirm that Kazakhstan’s leaders have no fear of closer ties with China. They recognize the inevitability of increased economic integration with their gigantic neighbor and its value for their country. And they welcome it.