Kazakhstan Is Inching Towards Its Watershed Moment in Eurasian Regional Leadership — and the Status of Putinism to the North Could Either Expedite or Impede Those Ambitions

Eurasia’s Middle Child Is on a Path Befitting Its Government’s Diplomatic Resume, and Astana Will Need All the Global Photo Ops It Can Get to Land Big International Deals

It’s been a busy October on global newswires due to the Israel-Palestine conflict, and that’s of course burying coverage of the all-important Russia-Ukraine war. But pushing further into the Eurasian landmass, to Kazakhstan in particular, the newflow doesn’t look nearly as dour. Sifting through clues and piecing them together show a relatively positive picture of Kazakhstan’s position as a “swing voter” on political and economic issues that have audiences from Seoul and Beijing to Ankara and Brussels. But with its near-term fate tied to a struggling Russia, it will likely need a level of diplomacy and dealmaking that borders on the unreachable to carve out its own identity as an independent market worthy of more investment.

Beginning with the bad news from October, there was a coal-mine fire late last month at an ArcelorMittal-owned asset that killed almost 50 miners, and now the government has taken control of the mine and steel mill, expediting a process to nationalize that was already underway. President Tokayev’s move may not lead to much improvement, as some Kazakh activists are already claiming, but the optics of protecting workers today present a stark shift from the memory of the December 2011 Zhanaozen massacre under Nazarbayev’s rule — which should be noted began as a workers’ protest. At this point, after multiple accidents under ArcelorMittal’s management, doing anything to step in at least creates the appearance of doing something. Considering ArcelorMittal’s recent record as a corporate steward of worker safety at steel foundries in Spain, Ohio, and Indiana, getting the company name off of the Temirtau complex may come to be seen as a positive over time.

Another phenomenon last month that has tragic roots by association – but may contribute to a more enduring sense of calm in how it was handled – was the lack of large-scale and violent protests on Day of the Republic, October 25. The events of January 2022 are very much top of mind, and any instance when the Tokayev government can diffuse possible bloodshed and blame-laying should be seen as a success. I know activists won’t agree, but I would ask them how they might envision an alternated reality for the condition civil society over the last two years of economic reconfiguration due to the Russia-Ukraine war and the rampant inflation pushed along by fuel-price increases if all of this had happened under the Nazarbayev regime.

If even the response to the mining disaster and the non-existent October protests could be construed as strong messaging domestically and internationally, then the good news from October should raise more eyebrows — while also underscoring the risk that Kazakhstan shoulders going forward. President Tokayev’s delegation signed 30 documents worth over $16 billion at the Belt & Road Initiative (BRI) meeting in China. That’s great in terms of Kazakhstan supplanting Russia as a logistics and industrial hub and pathway to the West — but a pair of numbers from 2022 should give everyone pause:
“Data published by Kazakhstan’s Ministry of National Economy shows Kazakh-Chinese trade turnover for January-August 2023 amounted to $19 billion, a 23 percent increase over the same period the previous year ($15.5 billion).”

That’s a material increase, and people have to know when they are looking at the numbers that a big chunk of those billions are headed for Russia. Which should lead to more brainstorming about inherent risks for Kazakhstan — is the Republic going to be a long-term partner of China, attracting more interest year-on-year for decades, or is at least a part of this interest via BRI just a hedge against not being able to work with Russia as much as Beijing previously had wanted? It appears to be much more the former than the latter, as seen in BRI deals beyond the Russia-related trade-volume spike, which is great for the longer term. However, if war-induced Russian economic damage washes back into Kazakhstan, hurting its growth prospects and budget, will the Chinese BRI leadership seek one-sided deals and scupper the incumbent good relationship? It’s what China often does when it thinks it has the upper hand — take a peek at the landfill of lending deals across south Asia and Africa.

Note that I haven’t even mentioned EU business interest in Kazakhstan yet — which is a bit obtuse of me considering that the French “Monsieur Le President” Macron just finished a two-day visit to Kazakhstan and Uzbekistan. Judging by the increased EU-Kazakhstan trade numbers for 2022, underpinned by Kazakh energy going west and EU industrial and consumer goods going east, there is obviously a material backdoor-to-Russia component.  And that looks to me like another waiting game whilst Kazakhstan’s counterparties keep their eyes on Russia’s problems, withholding depper and longer-term investments in the region.

While Kazakhstan can’t make expedited decisions for the EU and China, it can continue to use its domestic PR machine to make the country look attractive. One way is by keeping the IPO plan on track for some state-owned companies for 2024-25. Another is to maintain the plan for rural development that received almost half a billion dollars this year. It’s clear that Kazakhstan’s messaging both domestically and internationally is improving and oriented towards outreach — but as long as skepticism remains about corruption and the rule of law, there isn’t likely to be a sea-change moment while Putinism is still alive to Kazakhstan’s north. Should all of that come to an end in the near future, however, Astana and the Tokayev government’s internal and external diplomacy and PR will have the Republic in strong position to be a leading partner and market in Eurasia — one that won’t have a government in limbo, sanctions in need of repealing, or all of the other fun things awaiting its northern neighbor.