By Sergey Sukhankin

The recent negotiations between Kassym-Jomart Tokayev and Olaf Scholz in Astana have underscored the increasing interest of Western economies in Kazakhstan’s abundant natural resources. The country is richly endowed with strategic minerals, which could provide a substantial counterbalance to the dominance of China and Russia in the global supply chain, a situation that presents various economic and geopolitical challenges for Western nations. Nonetheless, in spite of its wealth in natural resources, Kazakhstan’s significant dependency on China and Russia complicates its potential role in meeting the West’s growing demand for strategic minerals. It is imperative that Western countries develop a concrete strategy that delineates specific steps to assist Kazakhstan in its transition from an overwhelming reliance on hydrocarbons to a more diversified export profile that includes strategic minerals. Absent such initiatives, it will be exceedingly difficult for Kazakhstan to position itself as a viable alternative to both China and Russia.

BACKGROUND:  Leading Western economies, including the U.S., France, Germany, and the United Kingdom, have expressed a pronounced interest in collaborating with Central Asian nations to explore their extensive yet underdeveloped reserves of strategic natural resources. Of particular significance are rare earth elements (REEs) and rare metals (RMs) such as uranium, lithium, tantalum, niobium, indium, scandium, vanadium, thallium, and gallium. This burgeoning interest is driven by two primary factors.  First, the objective of achieving net zero emissions necessitates a substantial increase in the utilization of critical metals. As projected by the International Energy Agency, the rising adoption of clean energy technologies is expected to quadruple the demand for REEs and RMs by 2040. Second, the recent policies enacted by Russia and China to restrict exports of critical metals have compelled Western nations to seek alternative sources for these essential materials. Given the geopolitical challenges in Sub-Saharan Africa – another significant producer of critical metals – Central Asia emerges as the only viable alternative, with Kazakhstan playing a pivotal role. In addition to its vast resource base, the Kazakhstani government has demonstrated a strong commitment to developing its considerable potential in the strategic minerals sector. President Tokayev has asserted that these minerals could serve as the “new oil” for the nation and its economy. Kazakhstan has not only entered into multiple international agreements to facilitate the entry of Western companies into its strategic minerals sector but also plans to declassify information regarding its REE and RM deposits, a move that underscores its dedication to becoming a global leader in this industry. Furthermore, the country intends to collaborate with neighboring Tajikistan in the search for and extraction of critical metals.

IMPLICATIONS:  If Kazakhstan successfully attracts foreign financial capital and expertise in its strategic minerals sector, the country has the potential to emerge as one of the world’s leading players in this industry. Furthermore, partnerships and collaborative initiatives between Kazakhstan and other regionally resource-rich countries, such as Tajikistan and potentially Uzbekistan, could positively influence the global critical metals industry while simultaneously reducing the West’s strategic and precarious dependence on China and Russia. Engaging in partnerships with Kazakhstan to fulfill its demand for strategic minerals presents a mutually beneficial opportunity for Western nations; unlike other suppliers, Kazakhstan is not facing comparable political destabilization (as seen in Sub-Saharan Africa), nor is it encumbered by geopolitical ambitions (like China) or neo-imperialist aspirations (like Russia), both of which could threaten regional stability and deter potential investors. However, Western efforts to leverage Kazakhstan’s extensive resource base may be impeded by three external factors. The first issue pertains to economic sustainability. If Kazakhstan, along with other Central Asian nations, successfully attracts foreign direct investment (FDI) in its critical metals sector, the commencement of large-scale production may lead to a significant decline in global prices for these commodities. Under such circumstances, the exploration and extraction of critical metals – processes that are hazardous, costly, and ecologically unsustainable – could become less economically viable for the country, while also posing potential harm to its ecosystem. Despite President Tokayev’s assertions, from a purely economic perspective, critical metals do not currently appear capable of serving as the “new oil” for the Kazakhstani economy. This situation could be exacerbated in the event of a surplus of critical metals in the global market. The second issue is the “China factor.” Currently, China dominates the global critical metals industry, possessing 35 percent of proven resources, 68.5 percent of extraction and mining capacity, and 80 percent of output. With the European Union’s dependency on Chinese REEs and RMs approaching 98 percent, coupled with China’s growing interest in Central Asian natural resources – driven by the rapid development of its domestic microchip and green energy sectors – Central Asia emerges as a region of strategic significance for China. Given China’s substantial influence in the macro-region, reinforced through soft power, investments, trade relationships, and the indebtedness of local actors, it poses a significant challenge for the EU and the U.S. to compete effectively with Beijing. Additionally, the Chinese approach to business, which emphasizes non-interference in domestic affairs and eschews democracy promotion, is likely to align more closely with the cultural values and traditions of many Central Asian countries, which are not fully democratic. The third issue concerns the “Russia factor.” Russia’s interest in Kazakhstan’s critical metals sector is motivated by factors distinct from those of China. Strategically, Russia aims to maintain its significant role in Kazakhstan’s uranium sector, as Kazakhstan produces over 40 percent of the world’s uranium and serves as a key supplier for Russia. Russia not only partially owns uranium mines in Kazakhstan but also plays a crucial role in the country’s export framework, with the port of Saint Petersburg serving as a vital transportation hub for these exports. From a logistical perspective, identifying alternative routes to Russia – such as the Middle Corridor – would necessitate legislative changes related to uranium transportation and require additional investments to enhance the capacity of these routes.  Even if these conditions are met, the possibility of Russia adopting a more assertive stance should not be overlooked. Historically, disputes have arisen between Russia and Kazakhstan over oil-related matters in the resource-rich Caspian Sea. Following Russia’s aggression against Ukraine in 2022, Kazakhstan has sought to position itself as an alternative supplier of hydrocarbons to the EU, which was marked by a “mysterious” explosion that resulted in the deaths of two workers at Tengiz, Kazakhstan’s largest oil field. The increasing anti-Kazakhstan rhetoric in Russian propaganda channels – reminiscent of narratives used against Ukraine prior to 2022 – often focuses on uranium-related issues. Therefore, one should not discount the possibility of provocations from Russia should circumstances develop in a manner deemed unacceptable to it. These three factors pose significant obstacles for Kazakhstan’s potential to play a significant role in the West's shift away from reliance on China (and, to a lesser extent, Russia) for critical metals. Importantly, neither China nor Russia is likely to relinquish their dominant positions as suppliers of REEs and RMs without resistance, in the face of Kazakhstan’s emerging presence in the market.

CONCLUSIONS:  Kazakhstan, with its abundant natural resources and commitment to a peaceful foreign policy, presents an ideal trade partner for Western countries seeking to meet their demand for REEs and RMs while diversifying their supply chains away from China and Russia. However, achieving this goal poses significant challenges due to Kazakhstan's vulnerabilities in relation to both countries. Without a concrete strategy from the West – a detailed plan that extends beyond simple import-export arrangements, resource exploitation, and vague commitments – Kazakhstan will struggle to fulfill Western demands on its own. Geopolitically insecure and lacking sufficient funding, technology, and expertise, Kazakhstan risks remaining a land of unfulfilled opportunities without comprehensive Western assistance. To avert this scenario, the U.S. should collaborate with the European Union to help Kazakhstan reshape its economic model, transitioning from an economy primarily reliant on oil exports to one that focuses on the export of strategic metals. This transition will likely require coordinated efforts to adjust infrastructure for specific objectives, significant investments, and innovative strategies to navigate the complex geopolitical landscape of the macro-region, which also includes influential regional players such as Turkey and Iran.

AUTHOR'S BIO: Dr. Sergey Sukhankin is a Senior Fellow at the Jamestown Foundation (Washington DC) and a Fellow at the North American and Arctic Defence and Security Network (Canada).

COMPETITION VS PARTNERSHIP: UZBEKISTAN-KAZAKHSTAN RELATIONS IN THE FIELD OF TRANSPORT AND TRANSIT

By Nargiza Umarova

Recent geopolitical crises in Eastern Europe and the Middle East have created favorable conditions for the development of intercontinental land trade routes, significantly enhancing the role of Central Asia as a transit region linking major Eurasian markets. This shift was anticipated to improve intraregional transport connectivity and facilitate the integration of Central Asian republics into global supply chains – both essential for the region’s economic growth. However, unity among the five Central Asian states on these initiatives remains elusive. Currently, these countries prioritize the creation of international transit corridors over local connectivity. Low coordination between them leads to duplication of projects, and the focus on their own interests becomes a source of unhealthy competition. Rivalry is particularly evident in the actions of Kazakhstan and Uzbekistan, each seeking alternative access to Turkish and European markets via the Caspian Sea.

BACKGROUND:  In 2018, the Central Asian states initiated a mechanism for regular Consultative Meetings aimed at enhancing multilateral cooperation in transport communications. A key priority identified was the alignment of national transport systems, a crucial prerequisite for boosting mutual trade and expanding the transit potential of the region’s countries. To facilitate this alignment, plans were proposed to establish a Regional Center for the Development of Transport and Communications Interconnectivity under the auspices of the United Nations, to develop a Strategy for Regional Transport Corridor Development in Central Asia, and to adopt a Regional Program for Transport Communication Development. However, years later, these initiatives remain unimplemented, although some positive developments have occurred. In 2018, Uzbekistan and Tajikistan resumed railway service along the critical Galaba-Amuzang-Khoshadi route, resulting in nearly a twofold increase in mutual trade. A similar outcome was observed between Uzbekistan and Kyrgyzstan following the launch of the multimodal corridor Tashkent-Andijan-Osh-Irkeshtam-Kashgar in the same year.  Uzbekistan and Kazakhstan have demonstrated considerable activity in advancing local transport projects. As the largest economies in Central Asia, these nations account for nearly the entire volume of intraregional trade, motivating them to develop new mutually beneficial freight routes. In 2021, the two countries agreed to construct the Uchkuduk-Kyzylorda road and railway, which will connect Kazakhstan's Kyzylorda region with Uzbekistan's industrial Navoi region, effectively reducing the distance between them by more than three times. Additional plans include the construction of the Darbaza-Maktaaral railway line and the Beineu-Shalkar road. Despite successful cooperation within the region, Astana and Tashkent occasionally find themselves in competition in the external transport and logistics arena, which can be characterized as a conflict of interests. A prominent example of this rivalry is the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. Following the onset of the war in Ukraine, demand for the Middle Corridor among global cargo-generating centers in both the East and West has surged significantly. This land trade route from China to Europe traverses Central Asia, the Caspian Sea, the South Caucasus and Turkey. The TITR serves as an alternative to the Northern Corridor, whose operations are hindered by anti-Russian sanctions. The route is experiencing robust development, with transportation volumes reaching 2.7 million tons in 2023 and projected to increase to 4.2 million tons in 2024. Since the start of this year, container transit from China through the Middle Corridor has increased by a factor of 14. Within a few years, the route’s capacity could expand to accommodate 10 million tons of cargo annually. With appropriate infrastructure improvements and enhanced terminal capacities, the Trans-Caspian route is projected to become 35 percent faster and 40 percent more cost-effective than the Northern Corridor in the near future.

IMPLICATIONS:  It is important to emphasize that nearly all Central Asian countries are involved in the Trans-Caspian International Transport Route (TITR), not solely Kazakhstan. According to experts from the European Bank for Reconstruction and Development (EBRD), there are three primary transit routes within the Middle Corridor: the northern route, which passes through northern Kazakhstan; the central route, which traverses southern Kazakhstan; and the southern route, which runs through Kyrgyzstan, Uzbekistan, and Turkmenistan. Kazakhstan occupies a uniquely advantageous position within the Central Asian segment of the China–European Union–China supply chain. This strategic edge stems from its shared borders with both China and Russia. Meanwhile, Uzbekistan is also striving to establish a significant role in transit transportation between China and Europe. Uzbekistan’s involvement in multimodal transport routes such as Kyrgyzstan–Uzbekistan–Turkmenistan–Caspian Sea–Azerbaijan–Georgia–Black Sea region, or Georgia–Turkey–European Union (part of the Transport Corridor Europe-Caucasus-Asia, TRACECA), as well as Kyrgyzstan–Uzbekistan–Turkmenistan–Iran–Turkey–European Union, supports its ambitions in this area. It is relevant to highlight the China-Kyrgyzstan-Uzbekistan highway, which allows cargo from China to reach Uzbekistan in two days, compared to the ten days required via Kazakhstan. Plans are underway to construct a railway along a similar route, which would considerably enhance the positions of Tashkent and Bishkek in railway freight transportation from China to the Middle East, thereby bypassing Kazakhstan’s current monopoly. At present, Kazakhstan is the only Central Asian country with railway checkpoints on its border with China. In the development of trans-Caspian transport routes toward the West, Central Asian states operate as both partners and competitors. Partnership is evident in their collaborative efforts to develop connecting routes that enable the nations of the region to link up with various transit branches of the Middle Corridor. For instance, as noted earlier, Uzbekistan and Kazakhstan have agreed to construct the Uchkuduk-Kyzylorda railway, which will be integrated into the Kazakh section of the Trans-Caspian International Transport Route (TITR). In 2019, Uzbekistan, in collaboration with Kyrgyzstan, Turkmenistan, Azerbaijan, Georgia, and Turkey, launched an alternative trade route to Europe via the Caspian Sea, known as the CASCA+ (Central Asia–South Caucasus–Anatolia+) corridor. Recently, the participating countries agreed to establish a consortium—a specialized body to coordinate the activities of this route. This development marks the project’s advancement to an institutional level, which provides a solid foundation for enhancing its competitive potential and boosting the transit capabilities of both Central Asia and the South Caucasus. It is also worth noting that, as early as 2014, Kazakhstan, Azerbaijan, and Georgia institutionalized the Middle Corridor by first forming a Coordination Committee, which later evolved into the International Association “Trans-Caspian International Transport Route.” These instances highlight the ongoing fragmentation among Central Asian states in the development of extra-regional transport routes. This fragmentation carries the risk of fostering unhealthy competition, which could generate discord among the countries in the region.

CONCLUSIONS:  Given the growing trend of deepening intra-regional ties in Central Asia, driven by the current geopolitical realities, it is increasingly crucial for Uzbekistan and Kazakhstan to integrate their transport project potential and establish joint coordination mechanisms. A coordinated approach to managing transit transportation through the Caspian Sea along the China-Europe-China axis is necessary, grounded in principles of equality and mutual benefit. Ensuring that the interests of one party do not overshadow those of the other is key to fostering balanced cooperation. Moreover, harmonizing the activities of the CASCA+ corridor consortium with the International Association “Trans-Caspian International Transport Route” appears essential, with the goal of ultimately merging both structures into a unified coordinating body with legal status. Developing common approaches to international transport corridors and accelerating the adoption of the “Strategy for the Development of Transport Corridors in Central Asia,” which was first proposed in 2018, is equally important. Additionally, the proposal to establish a Regional Centre for Transport and Communications Interconnectivity under the auspices of the United Nations remains a pertinent issue.

AUTHOR'S BIO: Nargiza Umarova is a Senior Research Fellow at the Institute for Advanced International Studies (IAIS), University of World Economy and Diplomacy (UWED) and an analyst at the Non-governmental Research Institution  “Knowledge Caravan” (Tashkent, Uzbekistan). Her research activities are focused on studying the developments of Central Asia, trends in regional integration and the influence of great powers on this process. She also explores the current policy of Uzbekistan on the creation and development of international transport corridors.

THE NEW CHALLENGE TO THE SCO 

By: Stephen Blank

The recent summit of the Shanghai Cooperation Organization (SCO) in Astana reveals that both Moscow and Beijing are seeking to reformat the organization in order to meet their global rather than its original regional goals. That process represents a serious challenge to the foreign policy autonomy and interests of Central Asian states and probably to regional security. As the center of gravity of world politics shifts ever more to Asia, the role and importance of Central Asia is likely to grow. These trends should be recognized and acted upon to assure that Central Asia does not become a closed sphere of Sino-Russian influence, which would retard its growth and transform it into a breeding ground for conflict.

BACKGROUND: The SCO was first set up to create an institutional framework by which China’s growing importance in and to Central Asia could be regulated. At the same time, it also constituted a forum for Central Asian governments whereby they could address not only each other but also Russia and China concerning their interests and needs and where all the parties could reach agreement on how to contend with shared threats, e.g. the genuine and continuing threat of terrorism. As such the SCO gradually evolved into a viable regional security forum where both Moscow and Beijing could present or implement their regional security initiatives and Central Asian states could present their interests and needs. Thus, it functioned to satisfy all the members’ needs as a purely regional security organization.

However, as world politics evolved towards a world order characterized primarily by great power rivalry and even threats of nuclear confrontation, Russia and China clearly intend to impart a wholly new purpose and direction to the SCO that threatens the interests of the Central Asian states. Membership now includes India, Pakistan, Iran, and Belarus. These additions to the SCO’s roster are primarily attributable to Sino-Russian maneuvers – great power calculations that outweigh regional concerns. Moreover, these new members of the SCO have also brought their rivalries, especially those between India and Pakistan over Afghanistan and Kashmir, and India and China over China’s Belt and Road Initiative (BRI), into the SCO, probably rendering the organization less effective as a security provider.  Finally, Russia’s war in Ukraine has also undermined its reputation as a security provider in Central Asia, not least because high-ranking scholars like Sergei Karaganov and officials regularly make veiled and even unsubtle threats against Kazakhstan, which they claim to be part of Russia. 

Recent trends, as expressed at the SCO summit in Astana and other high-level Russo-Chinese gatherings, indicate that both Russia and China have abandoned the idea that the SCO serves mainly as a regional security institution. In numerous speeches, Putin, Xi, and spokesmen for their policies now openly state that the SCO, like the BRICS, manifests a new and evolving form of multipolar politics led by Moscow and Beijing, which herald the rise of the East and South against a supposedly decrepit West. In this self-serving ideological depiction of the emerging world order, these formerly regional or economic organizations function to attack the West and validate Moscow’s and Beijing’s hegemony over weaker neighbors like Central Asia. This hegemony entails an unquestioned division of the world into spheres of influence and the extreme minimization of foreign influence in Central Asia.  

IMPLICATIONS: In this new world order, Russia’s visibly declining hegemony over Central Asian security and culture would be restored, possibly by force, and to judge from ongoing economic trends, under Chinese sufferance. While this may well be a delusional dream, it now holds sway in Moscow and represents another desperate effort to hold on to the wrecks of empire. As Sergei Radchenko demonstrates in his superb account of Soviet foreign policy, Moscow cannot claim the mantle of great power and imperial status if it lacks willing clients. Therefore, it will consistently attempt to subordinate its neighbors, including Central Asia. 

China shares this imperial world view. Its methods in Russia and Central Asia are primarily economic, yet no less coercive than Russia’s more heavy-handed approach. However, Beijing is happy for now to let Russia bear security burdens that it prefers to avoid, given the challenges it faces in Korea, the South China Sea, and India. And it certainly welcomes Russia’s growing dependence on China in economics and as provider of strategic technologies.

If this interpretation of the SCO gains traction, it entails several challenges to Central Asian members and India. First, the vision of the SCO as a Sino-Russian artifact of a multipolar order entails a diminution of Central Asian states’ sovereignty as free international actors. Beijing and Moscow will seek to coerce them into following their agenda, not a Central Asian one. The idea that the SCO is merely an artefact of a great power struggle over multipolarity and spheres of influence not only justifies pressure upon Central Asia to oust U.S. and European presence and influence from the region. It also aims to curtail Central Asia’s increasing outreach to the West and vice versa that is now finally taking place. This exclusionary Sino-Russian approach can only lead to economic isolation, stagnation, and subordination to Moscow and Beijing when both those economies have long since entered upon their own periods of stagnation.

Second, the triumph of this view of the SCO enhances Russia’s and China’s economic leverage on Central Asia. It allows Moscow to continue threatening Central Asian migrants and economies by playing the increasingly popular anti-migrant card in Russian politics.  Beijing will similarly employ the leverage it possesses through trade and investment deals to coerce local governments into an inferior position, especially if other alternatives are unavailable.

Third, Russian and possibly Chinese military threats, particularly against Kazakhstan, will increase. And fourth, at the same time Moscow and China will collaborate at China’s behest, given Russia’s extensive dependence on China, to exclude India from future major trade and transport routes as China has already done. Thus, the SCO will become a vehicle whose purposes also comprise the stifling of India’s growing power and interests in Central Asia. One form these processes will likely take is already underway whereby Russia will seek alignment with Afghanistan, ostensibly to stop terrorism and reaffirm its military hegemony over Central Asia. Indeed, its ambassador to Kabul now proclaims an alliance between the two states, an alliance that can only suppress Indian and Central Asian interests in expanding ties.

As part of this projected reorientation of the SCO, therefore, it will be subordinated to the exigencies of great power rivalry with the U.S. while the Sino-Indian rivalry in Asia will be institutionalized within it. The consequences may to some degree be unforeseeable; but are unlikely to redound to the benefit of Central Asian governments.

CONCLUSIONS: For interested parties, i.e. not only regional governments, but also the U.S. and the EU, it is necessary to prevent the resubordination of Central Asia to the renewed imperial fantasies of Russia and China. This entails constant high and low-level interaction among these states with regard to critical issues: terrorism, which clearly remains a real threat, future ties to Afghanistan, bilateral and multilateral energy, trade, transportation routes, rare earths, environmental reclamation projects, education, and defense cooperation. Only by such means can the West and its leading organizations contribute to the preservation of regional peace, trade, investment, growth, and mitigate looming environmental threats in Central Asia.

India too must step up its game here and realize the long-held but unfulfilled promise of enhanced ties with and support for Central Asia by carrying out an increasing number of projects on this same agenda with local governments. This would forestall a Chinese-led but Russian-supported effort to curtail Central Asian ties with both the West and Asia’s other key players. The newly announced South Korean plan for increased ties with Central Asia exemplifies what could be done. 

Finally, both the West and leading Asian powers should lend growing support to the rising trend among Central Asian states to enhance their mutual and regional cooperation. To the degree that foreign support and local perceptions foster regional cooperation on the many challenges facing Central Asia, they enhance local and regional capabilities while also raising the cost to Beijing and Moscow of interference in Central Asia. In other words, Western support for individual country projects and especially for multilateral cooperative projects encompassing the agenda presented above, are win-win and mutually beneficial. They build peace, economic growth and development, and preserve the sovereignty and territorial integrity of Central Asian states that is openly at risk from both Beijing and Moscow.

Enhancing Western influence and regional cooperation are proven ways of reducing conflict whereas spheres of influence invariably foster neo-imperial rivalries. The masquerade of Sino-Russian multipolarity will not have different results if we neglect Central Asia. Instead, we will only increase the costs to that region and to our own interests.

AUTHOR’S BIO: Stephen Blank is a Senior Fellow with the Foreign Policy Research Institute, Fprpi.org.

Svante E. Cornell

July 31, 2024

A key development in Greater Central Asian affairs is the rise of Middle Powers, states that are displaying considerable agency in shaping the region surrounding them and making their mark on international relations writ large. The first Middle Power to emerge and be recognized as such is Kazakhstan, through a combination of it economic might and its strategic approach to foreign relations. As Central Asia’s outside partners reassess strategies toward the region that have been rendered obsolete by events in the past several years, this new reality should feature centrally in approaches to the region.

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By Dmitry Shlapentokh

April 24, 2024

Recently, Kazakhstan’s President Kassym-Jomart Tokayev delivered a public address wherein he underscored the significance of the Golden Horde, also known as Ulus Jochi, to Kazakhstan. He emphasized that Kazakhstan stands as the true descendant of the Golden Horde, equating its historical importance to that of the Roman Empire. Tokayev emphasized the importance of ensuring international recognition of this fact. Additionally, he announced the commissioning of a comprehensive multi-volume history of Kazakhstan, with a dedicated volume specifically focusing on Ulus Jochi and its pivotal role in shaping Kazakhstan’s history. Tokayev’s recent revival of this ideology suggests that Kazakhstan, in stark contrast to Russia and implicitly other post-Soviet states, espouses principles of tolerance and peaceful coexistence.