KazAID to Invest in Eurasia’s Peaceful Future

By Martin Sieff and Michelle Witte

bags of food resizedIn December 2014, Kazakhstan made an important step towards launching its official development aid (ODA) program, the Kazakhstan Agency for International Development, or KazAID.

On Dec. 10, President of Kazakhstan, Nursultan Nazarbayev, signed a corresponding law. Earlier, on Nov. 3, Kazakh Minister of Foreign Affairs Erlan Idrissov and Resident Representative of the United Nations Development Program (UNDP) in Kazakhstan Stephen Tull signed an agreement on the UNDP’s support for Kazakhstan’s Ministry of Foreign Affairs in forming the agency, with Tull remarking on Kazakhstan’s transition from aid recipient to aid donor.

KazAID is the first ODA program among the Central Asian states, and one that will begin with a neighborhood focus.

Not Beginning, But Organizing

The launch of KazAID does not mark Kazakhstan’s first efforts to provide aid in its region or beyond – the country provided millions of dollars worth of fuel, seeds, medical equipment and other basic supplies to Kyrgyzstan during that country’s political and humanitarian crisis in 2010 and has been funding a scholarship program for Afghan students for several years now. Kazakhstan’s Ministry of Foreign Affairs said its assistance to different countries over the years has amounted to more than $100 million at the signing ceremony with the UNDP, and Tull called Kazakhstan “a significant donor, especially in the past six to eight years.”

The new agency, instead, will systematize and formalize Kazakhstan’s ongoing aid efforts and link them with the country’s own economic and foreign policy goals. In October, First Deputy Minister of Foreign Affairs of Kazakhstan Rapil Zhoshybayev told The Astana Times newspaper that “Kazakhstan has already been providing ODA for the last 10 years in the framework of international agreements and treaties.”

However, that work had often been unsystematic and one-off, he said. “Now we are raising it to a completely new level. All ODA will be provided in UNDP logoaccordance with the Foreign Policy Concept of Kazakhstan.” It’s been proposed that the main objectives, missions, principles and sectoral priorities of ODA be legislated, he said, and competencies between different government bodies will be distinguished and used appropriately.

“Moreover, KazAID will not become a charitable organization, providing funds at the disposal of foreign governments. KazAID will provide carefully-planned, targeted support to projects which are able to contribute effectively to the development of regional economies, safety and people’s well-being. We will cooperate with foreign states and regional organizations to choose the most attractive projects, as well as collaborate with Kazakhstan’s companies and nongovernmental organizations to apply their experience and knowledge.” Projects will be evaluated regularly, he said.

Reporting to Kazakhstan’s lower chamber of Parliament, the Mazhilis, on the draft aid law in late October, Idrissov called ODA a mechanism for fostering regional stability and prosperity, and that KazAID would be another tool for creating the external conditions for Kazakhstan’s ongoing development, in particular, for achieving the goals of the Kazakhstan 2050 Strategy and the high living standards it envisages for Kazakhstan’s citizens.

Combining Foreign Aid and Foreign Policy

Kazakhstan can’t afford to separate itself from the problems, current and future, the rest of the region faces, Idrissov told the Mazhilis in his October speech, especially with the coming withdrawal of coalition forces from Afghanistan. “Therefore, the main geographical focus of our ODA will be Central Asia, Afghanistan and the Caucasus in the long term. There is no country in our region, except Kazakhstan, that is able to provide such systemic support,” he said.

Indeed, its economic development – Kazakhstan was recently classified as an upper middle income country – and rising international profile lay more responsibility on Kazakhstan to help bring security and stability to its region, Idrissov said.

“The attitude is, ‘You received support and became stronger; now help others,’” Idrissov said.

afghanistan resized“This policy must be seen clearly in the context of Kazakhstan’s established multi-vector diplomatic grand strategy of seeking to maintain and extend the areas of regional stability across Eurasia,” Richard Weitz, director of the Center for Political-Military Analysis at the Hudson Institute, told EdgeKz earlier in 2014. “Kazakhstan’s primary security goal has always been to maintain regional stability. The extension of economic programs designed to help its neighbors is the natural extension of this strategy.”

The initiative must also be seen in the light of the U.S. and allied International Security Assistance Force (ISAF) military withdrawal from Afghanistan, Weitz said. “Kazakh senior government figures repeatedly express the need for regional stability and then link this goal with the need to settle the Afghan conflict. The logic is that the conflict must be settled to assure continued favorable conditions for international investment and rising standards of living in the region.” These will rest on, among other projects, ambitions plans to create transportation corridors and energy pipelines south to India and Pakistan.

Aid Against Extremism

The strategy makes sense, Arnaud de Borchgrave, director of the Transnational Threats Project at the Center for Strategic and International Studies in Washington, DC, told EdgeKz, because extremist, especially Islamist terrorism, has only been able to become a significant threat in countries with a stagnant or declining standard of living.

“Across all of Asia, the story is always the same,” de Borchgrave said. “We always see the same picture. The single most important factor in preventing the spread of extremist and revolutionary ideologies is economic growth and a broad increase in the standard of living. Very constructive economic development is always the best security against these threats that any country can have.”

“Kazakhstan, therefore, primarily owes its peace and security to its exceptional economic achievements,” de Borchgrave said. “We find the same pattern in Indonesia: Across a nation of 3,000 inhabited islands, stretching the equivalent distance from Los Angeles to New York, there is hardly any trouble at all, and the reason is the bright economic record of the past decade.”

Bringing New Understanding to Existing Models

Development economist and financial analyst Martin Hutchinson of BreakingNews.com, told EdgeKz that despite its inexperience, KazAID will enjoy a major advantage over its American model in its operations in Central Asia and the Middle East.

“The Kazakhs will have a deeper understanding of the underlying culture when dealing with the peoples and governments of their neighboring former Soviet republics in Central Asia, with their neighbors in Afghanistan, and with countries and regions in the Middle East,” he said.

“The new agency is, therefore, likely to be guided in its development and implementation of local programs by a greater ability to adapt quickly to regional realities,” he said.

Senior Kazakhstan government officials have said the new agency will follow the U.S. Agency for International Development’s example in providing support for trade, agriculture, economic growth, health, emergency humanitarian aid, assistance in conflict prevention and support for democracy in other countries.

USAID carries out programs in more than 100 nations. The new Kazakh agency will start on a far smaller, but very focused track, Weitz said.

Offering Aid, Attracting Diplomacy

The new agency will also fit with Kazakhstan’s broad, long-term strategy to make the country a regional hub for international diplomacy. That idrissov for edge aidstrategy has seen success in recent years with Kazakhstan’s chairing of the 56-nation Organization for Security and Cooperation in Europe (OSCE) in 2010 and of the 57-nation Organization of Islamic Cooperation (OIC) in 2011-12.

Kazakhstan’s chairmanship of the OIC gave Ministry of Foreign Affairs officials and senior diplomats experience in the patterns of aid required by developing Islamic countries and gave them an opportunity to see where Kazakhstan could help.

Idrissov spelled out the OIC and international Muslim dimension of the country’s new foreign aid strategy when he addressed the 12th OIC summit in Cairo in February 2014. The OIC can be a mechanism for promoting international cooperation and security, he said, and helping promote peace and progress, as well as meeting Muslims’ other needs, is one of its main tasks.

Idrissov hailed the summit’s final communique as an endorsement of many of the country’s core foreign policy positions: the Universal Declaration of a Nuclear Weapons-Free World, the Central Asian nuclear-weapons-free zone, active participation of OIC members in EXPO 2017 in Astana, establishing the headquarters of the OIC Islamic Organization for Food Security in Astana, the OIC Action Plan for cooperation in Central Asia and marking the 10th anniversary of the Congress of Leaders of World and Traditional Religions. All these policies share a commitment to foreign aid and to peaceful international cooperation in raising living standards throughout the developing world.

Domestic and International Reactions

The KazAID program has been welcomed in Kazakhstan’s government and among its partners, though it is not clear how well-informed the population is about the initiative.

Speaking with The Astana Times in early November, the U.S. deputy chief of mission in Kazakhstan Michael Klecheski said his country was “very pleased” with Kazakhstan’s new initiative.

“From our perspective, it is a sign of a new step in Kazakhstan’s development, because Kazakhstan is now taking another important role in the world. Needless to say, that process of approval takes some time and the project still has to pass a few more steps. However, we look forward to partnering with this organization. USAID … has been very supportive of the KazAID initiative and looks forward to working closely with KazAID in the future. It’s something we’re really excited about. … There are lots of challenges in this region, such as economic issues, water issues, connectivity issues, et cetera. It will be good to have a partner like KazAID when it is officially formed.”

Jun Kukita, chief representative of UNICEF in Kazakhstan, called it “a very important development for Kazakhstan, particularly in the globalized world, where everything goes beyond a country’s border.”

As the center of Eurasia, it makes sense for Kazakhstan to begin work among its neighbors, he said.

“Firstly, it is easier for neighbors to communicate with each other. Secondly, they share a common history and have common systems. As a result, prosperity and stability among your neighbors will immediately affect your country,” he said.

Costs and Challenges

KazAID will also have to be alert to deal with the pitfalls that other international aid organizations, including USAID, have to deal with, Hutchinson told EdgeKz.

“Every aid agency operating in foreign countries must face the twin issues of corruption and transparency in implementing its projects,” he said. “This has proven to be a major problem hindering U.S., European and other aid efforts in Afghanistan. The officials running the new agency will have to be alert to make sure that their best efforts and funding are not diverted into private hands.”

Falling oil prices and a predicted economic crisis in their northern neighbor may also dampen some enthusiasm for sending aid abroad. The Kazakh government will be cracking into its National Fund, a move ordered by President Nazarbayev on Nov. 11, in order to stabilize its own economy. With the President himself assuring citizens of Kazakhstan that their social welfare payments will remain steady, the population may question whether they should take care of themselves first and worry about their neighbors later.

In response to questions about cost, Zhoshybayev said formalizing aid won’t necessarily mean increasing it. “In general, we don’t plan to increase the existing cost side in the near future,” he told The Astana Times. “First of all, we are tasked to gather ODA carried out by various governmental bodies under one roof in order to maximize the benefits of our projects and guarantee the effective use of funds. This will be adjusted under the unfavorable conditions budget of ODA, but all of it in the future.”

While the challenges are real and significant, the prospects for the new agency and its programs appear bright. China, the U.S. and major Western European nations are all investing in oil and gas pipelines and major new road and rail transportation systems to carry the energy riches of the Caspian Basin to markets in the wider world. Investing in economic development in the poorer nations of the region would seem to remain a good business strategy – while having humanitarian benefits as well.

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