Recent remarks by Russian Energy Minister Aleksandr Novak, who called on oil producers to show greater discipline in adhering to agreed-upon output cuts designed to raise the price of oil, have caught the attention of Kazakhstan.
The country, together with Russia, Azerbaijan, and several other producers outside OPEC, joined Saudi Arabia, Iran, Iraq, and other cartel members in a November 2015 agreement to cut global production in an effort to boost lagging prices.
Kazakhstan finds itself in a trickier position than any other oil producer. Since the dismantlement of the USSR, Astana appeared to be a staunch Russian ally, being one of the first Soviet republics to join the Moscow-led Eurasian Economic Union (EEU).
At the same time, Kazakhstan continues to seek a solid political and commercial balance in its relations with the West, and especially with the European Union.
Although the economic benefits of joining the EEU have been minimal, Kazakhstan had to join the Russian-led EEU for political and security-oriented reasons, not economic or financial ones.
The Russian annexation of Crimea in 2014 has made divisions inside Kazakhstan grow. Since then, allusions about Russia seizing northern Kazakhstan have taken the form of a plausible medium-term threat.
In 1989, Kazakhstan was 39% ethnic Kazakh, while now it is nearly 70%, as many Russians have left and Kazakhs have enjoyed higher birth rates.
Still, ethnic Russians make up almost one quarter of the population of what was once the most ethnically mixed former Soviet republic, and Astana has to take into account the psychological importance of such a large ethnic Russian community, which Putin has pledged to defend across all the former Soviet countries.
Given the delicate nature of Kazakhstan’s ethnic distribution, the country always had to tread carefully and to permanently maintain a political and commercial equilibrium in its relations with Russia and the West.
Under Nursultan Nazarbayev, Kazakhstan’s long-standing leader, ethnic strife has been kept in check. The Russian language remains dominant nonetheless, with President Nazarbayev and those of his generation being more comfortable speaking Russian than Kazakh.
At the same time, in order to diminish Russia’s cultural and social influence, Kazakhstan has announced it would outline a new alphabet by the end of this year, switching from the Cyrillic-based script to Latin.
President Nazarbaev ordered that all publications, documents, and street signs switch from Cyrillic to Latin by 2025. The move is an obvious effort to emphasize Kazakh culture and distance the country from Russia.
Moscow’s impatient call to Kazakhstan to reduce the oil production is not the only sign of Russian pressure. Kazakhstan also had to join Russia, along with Belarus, Armenia, Kyrgyzstan, and Tajikistan, as a member of the Collective Security Treaty Organisation (although it hasn’t still agreed, as Armenia did, to establish joint military units with Russia).
On the other hand, Kazakhstan’s economy relies largely on the EU. Since 2002, the EU has grown to become Kazakhstan’s largest trading partner, being the destination of 40% of its exports. The country being a major energy supplier to the EU, the EU also supported Kazakhstan’s accession to the World Trade Organisation.
A balanced approach in building relations with the EEU, and at the same time with the EU, will thus remain a core element of Kazakhstan’s foreign policy. But Russian pressure is not the only liability. Kazakhstan’s position is also made complicated by Armenia’s presence as a member inside the Customs Union with Russia.
Armenia joined the EEU with Russia in January 2015, renouncing its planned Association Agreement (AA) and Deep and Comprehensive Free Trade Area (DCFTA) with the EU. Kazakhstan was not particularly supportive of Russia’s initiative to make Armenia a member.
Astana’s position, at least publicly, reflects a serious consideration for a “Turkic solidarity” with Azerbaijan. Nevertheless, in the end, Kazakhstan came to view Armenia’s accession as a kind of lever that could be used against Moscow to achieve more concessions and economic preferences.
Kazakhstan does not have the same strategic value for the Kremlin as Crimea. Russia’s Black Sea fleet was, and still is, based in Crimea, and Ukraine was seen as a vital rampart against NATO’s expansion.
But Kazakhstan does have important assets such as the Baikonur cosmodrome, the world’s first and largest operational space launch facility. The cosmodrome is still used permanently by Russia.
A Soyuz rocket was launched from there on 28 July, carrying a three-man crew from Russia, the US and Italy for a five-month mission on the orbiting International Space Station (ISS).
The permanent rope-dancing between Russia and the West will continue, given that the obvious geopolitical restrictions will remain and not diminish; their severity will depend on how relations between Russia and the EU unfold.
Kazakhstan will stay on the safe side and avoid antagonising Brussels or Moscow. For the time being, recent signals from Brussels show that the EU is not going to modify its format and “philosophy” towards Astana.
As for the EEU, Kazakhstan’s participation has not yet resulted in any significant positive economic impact. Russia’s own economic crisis played a role in this, as has the institutionally and economically weak structure of the EEU.
Still, Kazakhstan has not experienced any specific negative consequences either. Instead, joining the EEU has potentially prevented Kazakhstan from becoming the site of another geopolitical confrontation between Russia and the West.
However, Astana is now taking more cautious steps, not to irritate Moscow. For its part, Brussels has also demonstrated more flexibility and understanding in regard to Astana’s position. But, if Brussels is unable to offer anything more significant to Kazakhstan in key areas such as security, a situation of permanent déjà-vu and ambiguity in relations between Kazakhstan and the EU will remain for a long time.