Kazakhstan and Europe: Building Ties

By Alex Walters

IMG_5969Over the last 20 years, Kazakhstan’s diplomatic and trade ties with the European Union have grown quietly and steadily and have reached a point in the modern era of unprecedented cooperation and benefit for both sides. Economically, socially, and on the vital issues of energy and security, the bridge between East and West has never been stronger.
The enthusiasm of the EU and its member nations for closer ties with Kazakhstan is easy to explain. Europe wants more access to the energy and the investment opportunities in the fastest growing economy and largest energy reserves in Central Asia. Kazakhstan is also the largest and most interesting bridgehead for Western values in the heart of Eurasia. It provides a tolerant and cosmopolitan society that stands as an example for the future of the region.

The growing energy relationship between Europe and Kazakhstan can be seen in the success enjoyed by major European energy corporations, such as Total of France, EniSpA of Italy, Royal Dutch Shell of The Netherlands (and Britain) and BG of Britain in developing, in close cooperation with the Kazakh government and state energy companies, Kazakhstan’s oil and gas fields. Western Europe also remains eager to import as much of the natural gas riches of the Caspian Basin as it can.
Kazakhstan, ever so eager to diversify export routes for its huge hydrocarbon resources, also shares a European desire tocomplete the massive and game-changing Nabucco gas pipeline across Azerbaijan, former Soviet Georgia and Turkey to the Mediterranean, provided it is economically feasible for Kazakhstan-based companies to export via that pipeline. The Nabucco pipeline is an international project that would ensure direct transport of Central Asia natural gas to Europe while bypassing Russia’s traditional monopoly on such exports. European hunger for Caspian Basin energy is expected to increase significantly in the coming decades, and EU leaders want to diversify import routes beyond Russian control.

Kazakhstan, as the world’s leading uranium producer and exporter, also has a natural relationship with France, which is the Western world’s leading generator of nuclear energy from pressurized water reactors. Its reactors produce 80 percent of France’s total annual generating output.

Other areas of mutual economic benefit0111 between the regions include Kazakhstan’s aggressive industrialization development programme, which has created an enormous market for European steel, engineering products, expertise and industrial technologies. France and Germany are Kazakhstan’s biggest trading partners in Europe but trade and high-tech industrial ties are flourishing with countries across the continent. In addition, German and French companies have signed far-reaching exploration, mining and production agreements with their Kazakh counterparts to seek supplies of the 17 elements known as rare earths that are essential for the manufacture of many high-tech devices. The EU and its leading nations have also consistently supported Kazakhstan’s process of joining the World Trade Organization. These economic agreements and relationships are likely to solidify stable ties between Europe and Kazakhstan for decades to come.

Strong economic and cultural relations with Western Europe, especially its leading Western nations of Germany, France, Britain, Spain and Italy, also offer particular advantages to Kazakhstan that relations with other developed nations do not. They offer all the advantages of superpower support without the complications that come with Russian, American and Chinese relationships. European nations are also particularly attractive partners because they focus on economic relations and “soft” cultural and diplomatic ties. They do not, for example, seek military bases. There are fewer historical security issues that come with strong European ties. European cultural and even political influences are also less overwhelming than American ones are often perceived to be. Kazakhstan is committed, as President Nursultan Nazarbayev, Prime Minister Karim Massimov and Foreign Minister Yerzhan Kazykhanov repeatedly emphasize, to a multi-vector diplomatic and investment strategy. Maintaining and expanding ties with Europe are essential parts of that strategy.

Recent Kazakh diplomatic successes have also played roles in increasing the nation’s influence in Brussels and other European capitals. Kazakhstan currently chairs the 57-nation Organization for Islamic Cooperation and has been using its year of leadership as an opportunity to build cross-culture ties between the nations of the Muslim and Christian worlds. In 2010, Kazakhstan also had a successful year chairing the Organization for Security and Cooperation in Europe, culminating in an historic OSCE summit in Astana in December 2010 that reinvigorated the venerable body. And this year, the globally significant decision was taken to locate the new international low enriched uranium bank under the IAEA auspices in Kazakhstan. This is going to be a crucial institution which will help reduce the threat of the unauthorized proliferation of nuclear materials around the world, a danger that has long been a strategic priority for the Europeans as well as for Kazakhstan.
With so many of the same values and visions as its European partners, while also bringing to the relationship access to and a cultural understanding of the rising East, Kazakhstan is well positioned for continued strong relationships with Europe for years to come.

Oil Fuels Kazakh EU Relationship

Europeans have been fascinated by the oil of the Caspian Basin ever since the Greeks located the myth of Prometheus, the titan who took fire from the heavens and brought it to mankind, in the region. Today, Kazakhstan’s rapidly developing energy resources are in demand from potential customers around the world. But nowhere is the hunger for them greater than in the industrial nations of the European Union.

Kaynar Kozhumov, the director of the Agency for Research of Investment Profitability, told participants of the seminar Kazakh Oil and Gas Industry: Current Trends and Forecasts in Astana on July 2 that Europe was now by far the biggest consumer of Kazakhstan’s oil. The seminar was organised by the Kazakh branch of LUKOil Overseas.
Kozhumov said that although an increasingly large proportion of China’s oil comes from Kazakhstan, that total amounts to only 12 percent of annual Kazakh production. By contrast, 60 percent of annual oil production is exported to Europe, with 15 percent being retained for domestic use.

And Martin Hutchinson, a financial columnist for Reuter’s Breaking News and an expert on emerging markets, told EdgeKz that Europe’s need for Kazakh energy resources was certain to grow in coming years. “The relationship between Kazakhstan and Europe is a natural match because Europe is resource short and Kazakhstan has massive natural resources in energy and raw materials such as copper and rare earths – and these are exactly the areas that the Europeans need most,” Hutchinson said. “The Europeans also want to diversify so they are not totally dependent on Russia for their natural gas imports, and although Kazakhstan is a close trading partner of Russia, it will be a welcome additional source of gas and other resources.”

“All the Kazakhs have to do is to prove to the Europeans that they can be a reliable partner. And given the track record of some of their potential rivals, that should not be at all difficult for them,” the financial analyst said.
European Commission President Jose Manuel Barroso has come to the same conclusion. “The EU is the largest foreign investor in Kazakhstan. Two thirds of this investment goes to the field of energy,” he recently acknowledged.

When Barroso met with Kazakhstan’s Prime Minister Karim Massimov in Brussels in May, he noted, “The EU is already a major trading partner and the biggest investor in Kazakhstan. And we want our trade and investment relations to improve.” Barroso told Massimov,
“We fully support Kazakhstan’s accession to the World Trade Organization and we are ready to work swiftly and constructively to bring this accession process to a successful conclusion.”

Barroso said that during his meeting with Kazakhstan’s prime minister, they also “discussed the importance of Kazakhstan as an energy partner of the European Union. We have made solid progress in this area over the years and I am convinced that the new PCA (Partnership and Cooperation Agreement) that we are negotiating will bring new opportunities for cooperation also in the field of energy.”

A 2006 Memorandum of Understanding between the EU and Kazakhstan on energy issues outlines two road maps for cooperation on enhancing energy security and industrial cooperation. It includes a regular exchange of information concerning respective energy polices, cooperation on energy transportation infrastructure and on the development of environmentally clean technologies. The development of a Western China to Western Europe transportation corridor ensures that this cooperation is going to intensify.Prime-Minister_05new

As Commissioner Barroso told Prime Minister Massimov, “Kazakhstan is a key country in Central Asia and a leading partner for the European Union in our ambition to increase and improve our ties with this important region of the world. In fact, we have been improving very much our bilateral contacts with Kazakhstan.”

That energy partnership looks certain to keep the lights on in Europe and the oil fields busy in Kazakhstan for many years to come.

Diverse Cultures Share a Commitment to Peace

The ties between Europe and Kazakhstan stemming from economic relationships are easy to understand given Kazakhstan’s vast natural and energy resources and rapid economic expansion. However, Kazakhstan also offers a unique bridge to Asian and Central Asian cultures and an example of divergent cultures living in harmony.

Kazakhstan is the most Westernized and culturally diverse of the five nations of Central Asia. It is also the most open society in the region with thousands of its people, especially students, travelling to and studying in Western Europe and elsewhere each year. And, only 20 years after proclaiming national independence from the Soviet Union, its traditional cultural elements, including music, film and history have begun to be more understood in the West.

But Kazakhstan and Europe also share a diversity of cultures and a desire for those ethnicities and religions to live in tolerance and harmony. Kazakhstan’s achievement of developing a tolerant multi-religious and multi-ethnic society of about 70 percent Muslim and 25 percent Christian among its 16 million people holds lessons for the nations of Western Europe.

“Studies of the Kazakh model of interethnic tolerance and social cohesion have been translated into 56 languages and distributed in all (Organization for Security and Cooperation in Europe) OSCE countries. The book, Kazakhstan: An Integrated System of Unity and Harmony, has been published in many European languages and the issues of tolerance and public cohesion are widely discussed at international venues,” said Yeraly Tugzhanov, the deputy chairman and head of the Secretariat of the Assembly of the People of Kazakhstan (APK). “Kazakhstan’s model of interethnic tolerance and social cohesion has been presented before the Organization for Security and Cooperation in Europe in Vienna, the United Nations at its headquarters in New York and has been praised by foreign experts… Amid pessimistic predictions of a feared ‘clash of civilizations’, Kazakhstan presents the world with an example of organic cultural unity and dialogue.”

Kazakhstan is also working to share its culture with the West on a more individual basis. Kazakh President Nursultan Nazarbayev said in May that Kazakhstan was going to set up a new visa-free system for tourists from all countries in the 34-nation Organization for Economic Cooperation and Development. This will cover most of the nations of the EU and all the major Western European states. The move is expected to greatly expand Western European tourism to the largest nation in Central Asia. The group’s 34 members include most EU countries, the United States, Canada, Mexico, Chile, Turkey, Japan, South Korea, Australia and New Zealand.

But the deepest and most enduring bonds between the peoples of Kazakhstan and Western Europe exist in their shared commitment to preserving and advancing their societies through peaceful and mutual cooperation. The European Union grew out of a commitment among its peoples to avoid the horrors of the two world wars that devastated their continent in the first half of the 20th century. As soon as Kazakhstan became independent, its president and people took the historical decision to renounce all nuclear weapons and work for a world free of the scourge of nuclear weapons.

This convergence of values between Kazakhstan and the nations of the EU exposes the falsehood of the myth that civilizations are doomed to clash, as the late American political writer Samuel Huntingdon claimed. On the contrary, the two regions share a commitment to international peace, cooperation, and the peaceful spreading of open societies and democratic institutions.

Manuel_Barroso_NazarbayevCentral Asia and the EU
Expanding Dialogue and Cooperation

Veteran German diplomat Patricia Flor has devoted her life to building ties between the European Union and Central Asia. Her recent appointment as the European Union’s Special Representative for Central Asia, which became effective in July, opens a new era of bridge-building and communication between these two regions.

Flor’s appointment comes on the heels of a just concluded European Union and Central Asian five-year strategy from 2007 to 2012 to build stronger diplomatic, security and economic ties. She told a press conference in Brussels in July that her mission is not to question those ties, but to strengthen them and extend the partnership between the EU and the former Soviet republics east of the Caspian Sea. “My task is to build on this basis and further develop our relations in all fields – be they the rule of law, water and environment, economic and security issues,” said the former German special envoy for Eastern Europe, Caucasus and Central Asia. “My mission is to deepen the European Union-Central Asia relationship.”

Flor said she also wants a higher level security dialog between the European Union and Central Asian states. This will include bilateral discussions to focus on Afghanistan’s future after NATO forces fully withdraw in 2014. This message is likely to be appreciated in Astana as President Nursultan Nazarbayev has repeatedly voiced concern that post-conflict issues in Afghanistan must not be neglected to ensure a peaceful resolution of remaining issues there. That’s a perspective shared by many EU states.

Helping to resolve outstanding conflicts between Central Asian nations and encouraging them to develop a coordinated regional perspective are also high on Flor’s agenda. “All of the region comes into focus and if we want to have positive development in the region, and security and stability, both the Central Asian states and Afghanistan need to work in a regional approach in order to reach a positive outcome,” said Flor.

That regional cooperation message will be welcomed in Astana where the government has achieved increasingly close ties with its neighbors, in particular, Kyrgyzstan and Turkmenistan. Flor also touched on the EU’s desire to continue to be an energy partner to the region, which matches well Kazakhstan’s commitment to developing renewable energy alongside its oil, natural gas and uranium reserves. The EU “comes in and can be good and reliable partners” on energy efficiency and renewable energy, she said.

The nations of the European Union also recognize the need to patiently develop the institutions of democracy and the rule of law across Central Asia. And Flor emphasized their continuing commitment to helping Kazakhstan and its neighbors further along this path. “Certainly, we can share the experience of the European Union in terms of the rule of law, in terms of regional cooperation and building an open society,” she said.

All of these goals are expected to be addressed at an EU-Central Asia ministers meeting in the fall, she said.

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