Kazakhstan throws its weight around—and Russia is still in the mix

As rumors spread of multiple explosions and reports of unexploded chemical weapons detonated in underground bunkers in eastern Ukraine, reporters were shuttled away from the site in an armored vehicle. Numerous satellite images of a massive fissure in an apartment complex in southeastern Syria offered an ominous vision for the people of the East.

Meanwhile, some of President Nursultan Nazarbayev’s close officials watched a four-year-old minor gymnast compete in a former Soviet country that remains one of the wealthiest in the world. Television reporting in the Central Asian nation has grown nearly exclusively domestic in recent years, but the government still routinely deploys journalists at investment conferences, as it did in June when Nazarbayev received former Brazilian president Luiz Inacio Lula da Silva.

Then there is this: An American oil pipeline company based in Houston, Maersk Transport (a part of Maersk FIPCO, a wholly owned subsidiary of Denmark’s A.P. Moller Holding company) is seeking to gain joint control over a Kazakh oil pipeline. The European Union and Japan have expressed reservations about the idea, but China appears to be betting that it will succeed. Kazakhstan, a nation that is run by the same family for three generations, is also a rapidly growing hub for energy trade across the world. Oil for domestic consumption is still not produced there. Its untapped reserves are eyed by potential shale oil companies from the U.S. and the Middle East.

This is just part of what we’re seeing in the emerging world’s nation which, since it became independent from the Soviet Union 20 years ago, has experienced rapid economic growth and an increasingly well-educated population. While others in the developing world have seen their economies slow considerably, however, Kazakhstan’s GDP has increased an astonishing 55 percent over the past decade.

Kazakhstan’s present has offered some hints of things to come. In August 2016, Nazarbayev announced an $11 billion budget deficit for the nation’s 2018 fiscal year — an ambitious plan for an already oil-dependent economy. The government is depending heavily on an upcoming commodity price increase and further subsidy programs to ensure its short-term financial viability. In fact, Austerity measures announced by the Kazakh government in October have gone unappreciated by many domestic citizens, who are openly angry about the cuts announced to pensions and other benefits in the face of increased social spending.

But Kazakhstan also has begun to import New World sensibilities. Nazarbayev has placed his country firmly in the corner of President Vladimir Putin, who helped ensure his election to office by “buying” tens of thousands of votes from ethnic Kazakhs throughout the Caucasus, thereby paving the way for Kazakhstan’s first democratic elections in 1989. He has even continued to address Russian issues as a direct result of this relationship, bringing top Moscow officials to discuss terrorism, the so-called Islamic State, and sanctions with Nazarbayev as a means of maintaining direct economic ties with Russia.

However, the spotlight turns increasingly to the future. Kazakhstan has been growing increasingly impatient with economic restrictions placed by the United States, EU, and Russia as they make possible the efforts of Kazakhstan’s neighbors in the former Soviet Union. On Friday, the IMF released an updated assessment that, while projecting economic growth in the future, warned that revenue from the 2018 oil export agreements will be substantially lower than previously expected.

Already, Kazakhstan has begun to set its sights on cooperation in areas other than energy, if only to receive concessions from its neighbors, such as Ukraine. In October, President Nazarbayev, as part of a groundbreaking ceremony for the Trans-Sahara gas pipeline, announced that Russia, as a “common partner,” had agreed to accept deliveries of liquefied natural gas from the pipeline. This has been a longtime goal of Kazakhstan, which long saw the possibility of an expanded Russian military presence across the region as a real threat. Russia, however, has remained strongly opposed to the idea, in order to block a broader “competition” in Central Asia, as Kazakhstan and other former Soviet states attempt to carve up the region.

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