On May 10, the recently elected President of Kyrgyzstan, Almazbek Atambayev, paid an official visit to his country’s northern neighbor, Kazakhstan, to discuss bilateral economic cooperation and regional integration in Central Asia. In his welcoming address, Nursultan Nazarbayev reiterated Kazakhstan’s vision of the Kyrgyz Republic as a strategic ally and partner in the region. He also applauded Atambayev’s personal efforts to stabilize the economic situation and restore public order in a country whose political life has been marked by two revolutionary regime changes since 2005.
The two presidents agreed to broaden bilateral cooperation in such areas as energy, agriculture, transport and communications, mining and processing industries as well as tourism. In 2011, the cross-border trade between Kazakhstan and Kyrgyzstan amounted to US$ 750 million, which is 27 percent up from 2010. In order to achieve a level of economic cooperation equal to US$ 1 billion worth of overall trade, the leaders of both countries promised to improve the business climate and dismantle unnecessary administrative obstacles to the expansion of joint enterprises. According to the official statistics, Kazakhstan has invested more than US$ 1 billion into the Kyrgyz economy since its independence, although this effort was primarily directed toward the banking sector, with Kazakh banks widely represented in Kyrgyzstan and sometimes even outstripping local financial institutions in terms of loan portfolio.
With a view to accelerating these positive changes, Nazarbayev and Atambayev instructed their governments to prepare for enlarged sessions of the Supreme Interstate Council and the Kazakh-Kyrgyz Intergovernmental Council, both of which will be held by the end of this year. Another major decision agreed upon during the meeting concerns the establishment of a Kazakh-Kyrgyz Investment Fund headquartered in Almaty, with a second office in Bishkek. This institution will be charged with the identification of priority areas of bilateral cooperation and the allocation of public funds to the benefit of specifically selected projects. Moreover, Nazarbayev’s press secretary later informed that the Kazakh leader will be visiting Bishkek in August 2012. On this occasion, Kazakhstan and Kyrgyzstan are expected to sign a new agreement on strategic partnership detailing their shared objectives for the next 10 years. Currently, the Kazakh-Kyrgyz partnership is governed by the 1997 Treaty on eternal friendship and the 2002 Treaty on ally relations.
In a move to demonstrate his lasting commitment to the improvement of brotherly ties between the two capitals, Nazarbayev announced the reopening of a border checkpoint in the south of the Almaty region. This customs outpost was created during Soviet times, but had to be closed in the early 2000s due to security concerns. Earlier in April, another three roadblocks were opened for traffic on the Kazakh-Kyrgyz border, contributing to the reduction of waiting times for the customs clearance of transported merchandise. A few weeks later, the chairman of Kazakhstan’s National Border Service, Nurzhan Myrzaliev, declared that his country was planning to build 2.5 km long engineering facilities along the borders with Uzbekistan and Turkmenistan. According to his statement, this decision was taken to reflect the establishment of the Customs Union between Russia, Belarus, and Kazakhstan, with the latter’s customs officials gradually leaving the Russian border to relocate to the south. To nobody’s surprise, no construction has been announced yet with regard to Kyrgyzstan whose border is known for allowing Chinese contraband into Kazakhstan’s southern markets.
Most experts believe that by lowering border controls vis-a-vis Bishkek, Kazakhstan’s leadership is promoting Kyrgyzstan’s accession to the Customs Union, in compliance with previously reached agreements. Earlier this year, Vladimir Putin as Russia’s Prime Minister expressed his wish to see Kyrgyzstan as soon as possible among Customs Union members. In his turn, Nazarbayev promised to support the Kyrgyz membership by providing all the necessary technical expertise, but also warned that this process would be lengthy, because more than 60 international agreements must be adopted and ratified by the legislative assembly. He also advised his Kyrgyz colleague to take measures to improve Kyrgyzstan’s economic performance, as growing discrepancies between the members of a common customs zone may seriously distort their individual markets.
Despite the continuing improvement of their bilateral relations, Kazakhstan and Kyrgyzstan also have recurrent problems. One of these is the supply of Kazakh gas. In early May, a representative of KazTransOil, Kazakhstan’s state-run company responsible for the gas sector, made public the Kyrgyz debt for gas supplies, which has surpassed US$ 30 million. Although the payment was scheduled for May 1, the debt is still accumulating. Kyrgyz authorities have promised to pay it off by May 25, pending appropriate administrative decisions. In the meantime, Kazakhstan continues to supply Kyrgyz households and industries with much needed resources. This gesture of benevolence is in stark contrast with the recent gas spat between Uzbekistan and Tajikistan, wherein Tashkent cut off supplies altogether.