Economic, security relationships key to success for both
Since declaring independence almost a quarter century ago, the vast Central Asian nation of Kazakhstan has looked to the West – and especially to the United States – to help create new economic and security opportunities.
After voluntarily relinquishing a cache of 1,100 nuclear warheads remaining from the Soviet era and declaring Kazakhstan an American friend, President Nursultan Nazarbayev swiftly positioned his newly-independent nation to establish economic and political relations with Washington. Today, the seeds of that effort are bearing fruit, as the United States launches its New Silk Road initiative, reflecting a time in history when Kazakhstan and Central Asia served as a key transport route in global trade.
U.S. President Barack Obama has repeatedly stressed the important nature of the Kazakh-U.S. relationship, citing economic issues, human rights and regional security in light of the drawdown of U.S. troops from Afghanistan. Obama has also said he “very much appreciates” Nazarbayev’s leadership in Central Asia.
“The close relationship between our two countries extends beyond just the nuclear security issue,” Obama said during remarks at a nuclear security summit in Seoul, South Korea in 2012.
More recently, in January of this year, Nazarbayev and Obama reviewed the status of their countries’ bilateral relationship during a lengthy telephone call and exchanged views on managing the ongoing conflict in Ukraine.
Kairat Umarov, the Kazakh ambassador to the United States in Washington, told EDGE KZ that the New Silk Road initiative is natural outgrowth of the long and productive relationship between Kazakhstan and the United States. He said the U.S. and Kazakhstan “enjoy a dynamic, comprehensive strategic partnership.”
“It ranges from nuclear non-proliferation, political dialogue on international issues, the geopolitical situation in our region, to trade and investments, higher education, science and technology and climate change,” Umarov said, adding that biomedical research and green technologies are also under discussion.
Nisha Desai Biswal, the U.S. State Department’s assistant secretary state for South and Central Asian affairs, summarized America’s ambitions in Central Asia during a January speech in Washington. The U.S. withdrawal of military troops from neighboring Afghanistan factors heavily into the American geostrategic calculation in the region.
“We are focused on building a regional energy market, facilitating trade and transport, improving customs and border procedures, and linking businesses and people,” Biswal said. “The success of these efforts will be critical for… securing Afghanistan’s economic ties with its neighbors and creating important ties between Central and South Asian economies.”
Biswal acknowledged that Central Asia’s political and ethnic diversity makes for complicated politics.
“But it also underscores its untapped potential,” she added. “What some perceive as an isolated economic zone, to others equals one of the last true frontier markets for development, investment, innovation, and growth.”
With the announcement of its New Silk Road initiative in 2011, the U.S. government noted its intent to ease the flow of commerce between rapidly growing South Asia, with its demand for inexpensive, efficient, and reliable energy, and Central Asia, which owns a repository of vast energy resources, including oil, gas, and hydropower. Directing some of those resources southward from Central to South Asia through Afghanistan creates a win-win for both the region’s energy suppliers and users.
To that end, the U.S. has committed $15 million toward the CASA-1000 regional electricity grid following a commitment of $526 million from the World Bank to the project last year. The U.S. has also invested more than $1.7 billion in support of energy transmission lines, hydropower plants, and associated reforms in Afghanistan since 2010. In the realm of trade and transport, the U.S. has endorsed Kazakhstan’s accession to the World Trade Organization as well as a Cross-Border Transport Agreement between Kyrgyzstan, Tajikistan, and Afghanistan.
The American government has also organized trade delegations, meetings and conferences in Astana, the gleaming new capital in central Kazakhstan, Almaty, its largest metropolis, resulting in millions of dollars’ worth of trade deals.
In March, two high-profile American officials explained why – and how – the United States is adjusting its policies in Central Asia to reflect the region’s importance.
On March 31, Deputy Secretary of State Anthony Blinken gave a wide-ranging speech at the respected Brookings Institution during which he stressed the importance of Central Asia to U.S. security and economic interests.
“Our security is tied to a stable Central Asia, and at the same time we see a region of enormous potential, a region that could act as an economic bridge from Istanbul to Shanghai and provide opportunities for our own businesses, technologies, and innovations to take root; a region that could offer goods and energy to the booming economies of South and East Asia; and a region that could serve as a stabilizing force for Afghanistan’s transition and an indispensable partner in the fight against narco-trafficking, terrorism, and extremism,” Blinken said. “To help unleash this dynamic potential, the United States stands committed to investing in the region’s people and its political and economic stability.”
Blinken also said America’s “own security is enhanced by a more stable, secure Central Asia that contributes to global efforts to combat terrorism and violent extremism” and “that stability can best be achieved if the nations of Central Asia are sovereign and independent countries, fully capable of securing their borders, connected with each another and with the emerging economies of Asia, and benefitting from governments that are accountable to their citizens.”
The high-ranking State Department official acknowledged that America’s New Silk Road policy in Central Asia will be vital to both American and Central Asian interests.
“By deepening these security partnerships, we are also investing in a stable foundation for Central Asia to unlock its great economic potential,” he said. “The images of the old Silk Road – when Central Asia was truly at the crossroads of civilization – do not have to be just a memory. Past can become prologue. Today, Central Asia is not only bursting with resources, but brimming with youthful, entrepreneurial potential.”
A day earlier, on March 30, Richard Hoagland, the Principal Deputy Assistant Secretary of State for South and Central Asian Affairs and a former U.S. ambassador to Kazakhstan, posed a rhetorical question about Central Asia during a speech at Georgetown University in Washington, D.C.
“Why should the United States care about the countries of Central Asia?” Hoagland asked. “The most fundamental reply is this: Look at the map. Central Asia shares borders with Afghanistan, China, Russia, and Iran – this is an ‘interesting’ neighborhood, to say the least. If nothing else, geography makes Central Asia critically important for the United States.”
But Hoagland noted that, of course, there is more to the region than geography.
“Central Asia is comprised of secular governments with majority Muslim populations,” Hoagland said. “While the region’s governments still struggle to find a balance between secular state policies and religious freedom, its Muslim majority and religious minority groups have lived together peacefully for centuries.”
“Further, the region is awash in natural resources,” Hoagland pointed out. He went on to note that: Turkmenistan has the fourth-largest natural gas reserves in the world, Kazakhstan has the second-largest oil reserves of the former Soviet Union, second only to Russia, Uzbekistan is a major producer of uranium (as is Kazakhstan) and has large natural gas reserves, as does, quite likely, Tajikistan, and Kyrgyzstan and Tajikistan have significant hydro-power potential.
“The United States clearly has an enduring interest in strong bilateral relationships with each of the five Central Asian states,” Hoagland said, adding that the U.S. presence will remain in the region even as it transitions out of Afghanistan.
The fact that the U.S. is investing millions of dollars in new embassies is yet another indication of the superpower’s interest in Central Asia.
“If you want objective evidence, simply look at the fact that we have built, or are now building, major new, state-of-the-art embassies in every capital of Central Asia,” Hoagland said. “Why would we expend this kind of taxpayers’ money if we weren’t serious about long-term relationships? I want to emphasize: the U.S. diplomatic presence in Central Asia is not temporary; it’s enduring long into the future.”
Jan Kalicki, a scholar in global security with expertise in Central Asian affairs at the respected Wilson Center think tank in Washington, said the intensive U.S. focus on Central Asia as it withdraws from Afghanistan is evidence that the U.S.-Kazakh bilateral agenda is increasingly multi-faceted and inter-connected.
“I would call it not so much a shift in the relationship as a broadening of the relationship, so that economics are just as important as the political and security dimensions,” Kalicki, who used to work on relations with the newly independent states in the Clinton administration in the 1990s, said. “This is a positive trend.”
The New Silk Road Initiative is integral to that effort.
Both countries stand to benefit by directing their trade not only bilaterally and globally – for example through the World Trade Organization – but on a wider regional basis, which would be facilitated by the Silk Road initiative,” Kalicki said, adding that both countries are looking to get beyond an economic relationship based primarily on natural resources.
“The oil, gas and minerals – including uranium – dimensions are key, but we both share an interest in economic diversification,” he said.
Of course, the U.S. isn’t the only major world power with economic, political and security interests in Kazakhstan. China looms to the east while Russia abuts Kazakhstan on the northwest. Russia and China are both aiming for a larger presence in Kazakhstan and Central Asia and in some cases crafting policies that accommodate each other. Kalicki said that will create natural tensions as U.S., Chinese and Russian companies compete for contracts in Kazakhstan.
“None of these is exclusive of the other, but there will be natural competition as to which companies will take the lead on specific projects,” he said. “In general, Kazakhstan has a strong interest in increasing its ties with the West and in the broader region, as well as its traditional ties with its largest neighbors.”
S. Frederick Starr is the founding chairman of the Central Asia-Caucasus Institute and Silk Road Studies Program, a research center affiliated with Johns Hopkins University in Washington. Starr told EDGE KZ that American and, to some extent, European ambitions in Central Asia are relatively undeveloped – at least for now.
“As of this moment, the West has what is at best a declarative policy, with neither a carefully conceived strategy nor focused tactics for achieving it,” Starr said. “As of now, the U.S. has neither planned nor implemented a program to encourage western governments and especially the private sector to take an active and central role in the soft infrastructure (freight forwarders, logistic firms, insurers, hotels, supply bases, storage facilities, fuel suppliers, etc.) of the new corridor.”
“Absent this, the Central Asians’ balanced strategy remains a pipe dream, and the security of their region is left, by default, increasingly in the hands of China and Russia,” he added.
That explains why the U.S. government is so keen to develop its presence in Central Asia. If China and Russia succeed in squeezing U.S. interests out, it will exacerbate American concerns about security in the region.
“It would directly threaten U.S. interests, which call for strong, economically viable, and sovereign states in Central Asia to build their own security from within, rather than having it imposed from without – which for 2,000 years has been a formula for instability and struggle,” Starr explained. “On this point U.S. interests, actively pursued, coincide with China’s and Russia’s legitimate concern for stability in the areas to their west and south, respectively.”
Hillary Clinton, as the U.S. secretary of state in 2011, called the New Silk Road initiative “a reflection of the Obama Administration’s enduring commitment to the region, recognition of the vital importance of economic and energy connectivity, and a representation of our belief that shared prosperity can lead to stability and security.”
Umarov, the Kazakh ambassador in Washington, also said “economic cooperation is a vital component of our engagement,” noting that the U.S. is one of Kazakhstan’s largest investment partners. The U.S. has invested $46 billion in Kazakhstan since it gained independence in 1991. Currently, there are about 300 Kazakh-U.S. joint ventures in Kazakhstan and in 2014 the bilateral trade volume was $2.4 billion, with Kazakh exports totaling $411 million and imports amounting to $2 billion.
Overall, Kazakhstan is the 74th largest importer of goods from the United States and the 70th largest exporter of goods to the United States.
“That definitely does not meet our potential,” Umarov said. “Therefore, the two sides are working together to exchange high-level official visits and organize business missions from the U.S.to Kazakhstan.”
As Biswal, the U.S. State Department’s point person on Central Asian affairs, put it America sees vast economic opportunity not only for itself, but also for Kazakhstan and all of Central Asia, by strengthening ties in the region.
“A more stable and prosperous South and Central Asia is directly in the U.S. interest, and a more economically-connected region will ensure this stability and prosperity is widely shared and endures for generations to come,” she said.