Central Asia Breaking Free

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As Russia mobilises more troops and financial resources to support its war with Ukraine, countries on its southern fringes sense a golden opportunity to break free of Moscow’s control and move closer to Europe. It will be a gradual process of decoupling, however, with the smaller nations in the Caucasus and Central Asia fearing a flare-up of old conflicts.

The country that is making the most progress in loosening the reins is Kazakhstan, which shares a long border with Russia and has a sizeable Russian-speaking minority. Kazakhstan is also heavily dependent on Russia to transport its oil by pipeline: over 80% of its crude oil is exported across Russia, mostly via the 1.4 million barrel per day Caspian Pipeline Consortium line that goes to a terminal outside the Black Sea port of Novorossiysk.

Kazakhstan’s president Kassym Zhomart Tokayev, a wily former diplomat who can read Russia’s President Vladimir Putin as well as anyone, may look back at two events last autumn as playing a crucial role in his country’s evolution.

On Sep. 15, Xi Jinping, the president of neighboring China, visited the Kazakh capital, Astana, on his first official visit since the outbreak of the Covid-19 pandemic in early 2020. As he did with Russia during a meeting with Putin just days before the invasion of Ukraine on Feb. 24, Xi stressed the “unbreakable” friendship between China and Kazakhstan and stressed the importance that oil and other sources of energy play in the relationship, under the auspices of the ”Belt and Road” initiative.

From Kazakhstan’s point of view, the most important part of the visit was Xi’s pledge to “oppose external forces’ interference in the affairs of Central Asian countries,” as reported by Chinese state media. This was perceived as being a warning to Russia that China would not allow it to destabilize Kazakhstan and its smaller neighbors. Given that Russia depends on China more than ever, especially as a buyer of its oil and gas, these words would not have been taken lightly by the Kremlin. Since then, Putin has appeared to be more conciliatory in his public interactions with Tokayev.

Another key moment was Putin’s decision on Sep. 21 to declare a partial mobilization to bolster its campaign in Ukraine. This caused a flood of Russians across its borders, with some 200,000 rushing into Kazakhstan, according to the Kazakh government, of which around 20% opted to stay there. Under the terms of the Russia-Kazakh economic union, these escapees are free to work and take advantage of Kazakhstan’s business-friendly environment.

Regional Hub

Kazakhstan is also becoming a new regional hub for dozens of Western multinationals that have left Moscow because of sanctions. This has helped the country to build new economic bridges with Europe, which now tops Tokayev’s foreign policy agenda.

After winning a thumping majority in the November snap elections, Tokayev wasted no time in cozying up to the European Union with a two-day official visit to Paris that included a pledge to step up cooperation in renewable energy, among other things.

Another key external player for Kazakhstan and other former Soviet states is Turkey, which is taking full advantage of its position as a “corridor” linking Central Asia and the Caucasus to Europe.

Energy plays a decisive role in Turkey’s relationship with Kazakhstan and the wider region. Early this year, Kazakhstan began shipping oil across the Caspian Sea to Azerbaijan, and then overland to the Turkish Mediterranean via the Baku-Tbilisi-Ceyhan (BTC) pipeline, operated by BP. Tokayev’s longer-term plan is to develop a much larger Trans Caspian transportation system that will also link up to the BTC system.

Some analysts believe Kazakhstan should have done much more to loosen its dependence on Russia as a transit country and seek new alternative export routes. “This has left Kazakhstan vulnerable, and Tokayev will make sure it doesn’t happen again,” a long-time industry source in Kazakhstan says.

Azeri Ambitions

Azerbaijan, which like Kazakhstan is a major oil producer in the region, is also nudging closer to the EU and, in the space of just two years, has become one of its main suppliers of gas. Last year, the EU received more than 11 billion cubic meters of gas delivered via the 878 kilometer TAP pipeline that runs from the Greek-Turkish border across Albania and then under the Ionian Sea to southern Italy.

The EU is desperate to get hands on more Azeri gas as a long-term alternative to supplies from Russian state giant Gazprom. In a visit to Baku last July, the EU’s top commissioner, Ursula Von Der Leyen signed an agreement with Azeri President Ilham Aliyev to double gas imports via TAP by 2027. "The EU has therefore decided to diversify away from Russia and to turn to more reliable, trustworthy suppliers," she said. There are doubts, however, that Azerbaijan has sufficient gas reserves to ramp up sales to Europe much beyond current levels.

Caucasus Concerns

Azerbaijan’s relationship with Russia has changed since it won a six-week war with its neighbor Armenia, in 2020, in which it recaptured chunks of territory it had lost in the early 1990s. Russia failed to come to Armenia’s rescue, effectively reneging on a long standing defence pact to protect its ally, and forcing it to sign a humiliating peace deal in the Kremlin later that year.

Armenia is worried that Azerbaijan may try to renew the conflict and snatch more territory, and that Moscow will once again look the other way. There is no escaping the reality that another war in the South Caucasus could have disastrous consequences for the entire region, imperiling flows of oil and gas across Turkey and destabilizing other countries such as Georgia and parts of southern Russia. Iran, which borders both Azerbaijan and Armenia, may also be dragged into the conflict.

If, as seems likely, the Russia-Ukraine war grinds on indefinitely, it is safe to predict that the countries of Central Asia, led by Kazakhstan, will become more closely aligned with China on the one hand and Europe and Turkey on the other. In the South Caucasus, further integration with the EU looks inevitable.

Paul Sampson is a senior correspondent at Energy Intelligence based in London. The views expressed in this article are those of the author.

Security Risk , Resource Access
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