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    ISAS Events

    Kazakhstan and China’s Road Belt Initiative: Implications for the Region

    Event Title: ISAS Ambassadors’ Lecture
    Topic: Kazakhstan and China’s Road Belt Initiative: Implications for the Region
    Date/Time: 17 May 2018 | 15:00 - 08:16
    Venue: ISAS Board Room, Level 9, 29 Heng Mui Keng Terrace
    Speaker/s: Amb Dr Usen A. Suleimen
    Description: The Seminar by Dr Usen Suleimen, Ambassador of Kazakhstan to Singapore, was chaired by Dr Iftekhar Chowdhury. Amb Suleimen mainly talked about Kazakhstan’s economy, its evolution from the Soviet period to today and its current goals and potential. He spent the last part of his presentation to talk about Kazakhstan’s engagement in the BRI.

    Economic policy_Kazakhstan’s stance in economics and politics is a pragmatic one. The country follows the motto “Economy first, politics second”, derived from Lee Kwan Yew’s doctrine. LKY visited the country just before the collapse of the USSR and the re-foundation of Kazakhstan as an independent country. Nazarbayev, today leading the country as its President, during that meeting “learnt capitalism very quickly” (cit.), and from independence has made Kazakhstan to replicate many Singaporean features and institutions (e.g. Tamasek, SBF, IE…).

    Under the presidentship of Nazarbayev in 25 years the country has achieved incredible milestones from the point of view of economic development, becoming the leading economy in Central Asia. Kazakhstan is the most remote country in the world from the sea, however is rich in all minerals: number one producer of uranium, second in zinc and copper, great producer also of wheat, grains, fine cotton. 70% of the country’s income derives from sell of crude oil.

    During Stalin’s regime, raw materials were sourced from non-Russian Soviet republics (like Kazakhstan), while factories for their transformation were only in Russia. This had two aims: 1) to perpetuate dependence of Soviet republic from Russia; 2) to artificially create jobs: the distance between sources and factories implied the need of transportation routes and services. When the USSR collapsed, all satellite republics found themselves with no infrastructure. However today Kazakhstan managed to (partially) fill the gap; it has many industries which were not there in Soviet era. The development strategy “Kazakhstan 2030” was completed in 2012; now the country is working on the implementation of “Kazakhstan 2050”, a strategy whose name translated in English means “Bright path/ Bright future”. This is the most recent economic policy of the country, aimed at making Kazakhstan join the group of 30 developed countries by 2050.

    The country has been ranked the 36th in term of ease of doing business. Its GDP growth was 4% in 2017.

    Due to good inflow of petro-dollars, Kazakhstan was able to buy the best technology available in the world. It has built a new city, then became the new capital, Astana, in 14 years.

    Ethnic policy_Kazakhstan successfully avoided the ethnic instability which affected (and still affects) many post-soviet nations. It is a multiethnic country: in it 130 different ethnic groups co-exist, with different their confessions (Islam, Orthodox/Catholic Christianity, Judaism, Buddhism). It never experienced episodes of racial tension after independence. It has historically received many refugees (religious/political) in correspondence of different historical events and from different parts of the world. (ex: adoption of orphans during WWII by every Kazakh family).

    Originally Kazakhs were worshippers of the Sky, then became Zoroastrians, then were converted to Islam by the Arabs. They maintain their nomad heritage in their lifestyle and culture (hospitality is a core value; it derives from the fact that Kazakhs used to live isolated in the steps, and travellers were seen as source of news from the outside world). Kazakhstan is today a Muslim but secular country.

    Nazarbayev created the “Congress of the leaders of world and traditional religions”, aiming at transforming this organization in a sort of UN of religions, to be headquartered in Kazakhstan (Israel and Iran have joined already). Economic outreach_He also created the Eurasian Economic Union (EEU), aiming at becoming a sort of European Union of Central Asia. The members countries are all Muslim, neighbouring, and speaking languages from the Turkic group. It took 22 years to the countries to agree on the 8-pages declaration of creation of the EEU. Today the EEU already has a FTA with Vietnam, and is negotiating one with Singapore (possibly to be conclude next year), China, Korea, India.

    The EEU is a vital issue for Kazakhstan, in particular because of its ability to boost FTAs. Kazakhstan has a lot of surplus production of wheat, which is exported both as grain, and as vodka (ex: vodka exported to Vietnam).

    So far, relations with Southeast Asia have been limited, because Kazakhstan did not have resources and time to do so. However, it is now working on strengthening those relations. Various Singapore companies and engineering consulting groups are already active in Kazakhstan (Mentioned George Yeo).

    In this sense, the BRI helped to “opening to each other”.

    The Nazarbayev government also created the Astana International Financial Centre, prototype of the other world financial centres, aiming at filling the gap for Eurasia. It aims at becoming a financial hub (like London, Wall Street, Singapore, Hong Kong, etc) and also at facilitating the BRI implementation.

    Foreign policy_After independence, Kazakhstan got from the USSR an “important inheritance”, that of nuclear weapons (it had the 4th largest nuclear arsenal in the world). However, as a goodwill sign to prove its peaceful stance in international relations, it renounced to it, giving an important contribution to non-proliferation and disarmament. (He mentioned that Libya and Palestine tried to persuade Kazakhstan not to renounce to the nuclear arsenal, since the country could have been used as a shield by Middle-Eastern Muslim nations against Israel and the US; to do so offered equivalent of ¼ yearly GDP; but Kazakhstan did not accept).

    This contributed to make Kazakhstan the 2017-18 non-permanent member of the UNSC, a matter of great pride for the government.

    In Soviet era, Kazakhstan was a testing area for the URSS, and still today it bares the consequences of this (children born with deformities, etc). In 2016 it has created the Bank for low enriched uranium under the IEIA, to support the civil use of nuclear power.

    Contribution to multilateralism and peace_ During the Ukrainian crisis, Kazakhstan invited Russia, Ukraine, Belarus President to meet.

    It hosted 2 rounds of negotiations in Almaty for the Iranian nuclear deal.
    It acted as a mediator during the recent Turkey-Russia diplomatic tensions.
    It hosted 9 rounds of negotiations on Syria (Tokyo, Iran, Russia and others).

    On the BRI_Kazakhstan in a fundamental part of the BRI (a considerable portion of the corridor goes through Kazakhstan). The BRI will provide the country with 5 bln USD per year. This will facilitate Nazarbayev government in its endeavour of filling the infrastructure gap which Kazakhstan has inherited from the Soviet era (see above).

    The BRI comes at a good moment in time: the pragmatism and vision of Kazakhstan’s Nazarbayev corresponded with those of China’s President Xi. Indeed, just before the BRI had been announced (that too, in Kazakhstan), Kazakhstan had already started its new economic policy “Bright Future” (see above).

    At the moment, both Kazakhstan and China have completed their respective sections of the “Western China-Western Europe” path of highways. Russia needs to complete its section.

    One of the drawbacks of BRI is that on the wayback containers will travel empty. Kazakhstan, being placed at the mid-way, can re-load the containers. This is one possibility which deserves some consideration. It can also benefit Southeast Asia, creating a link for goods transportation between SEA and Europe.

    Amb Suleimen shared few details on the following areas under development within the BRI framework:

    “Trans-caspian international transport route”;
    “Baku-Tbilisi-Kars line”;
    “Khorgos special economic zone”;
    “Kazakh-Chinese joint territorial in Lianyungang”;
    “Kuryk infrastructure” near Aktaj port.
    (for more details refer to the slides).

    Few days ago in Sochin Nazarbayev re-proposed (he had already done it in 2016) the Central-Asian Canal, which would link the Caspian Sea and the Black Sea (!)

    Another institution created by President Nazarbayev is the Kazahstan-Asia Pacific Trade and Commerce Chamber, in Singapore. -

    During the Q&A, when questioned with regard to the possibility for Kazakhstan of becoming another victim of the debt trap, like other beneficiaries of Chinese loans before it (ex Pakistan), Amb Suleimen replied that “debt will always be there, even for a century...it does not matter, we will pay back”. He added that “all the world takes debts”, as well as that China is in many aspects a more reliable partner than other Western democracies, like the US These exercise considerable pressure on non-Western countries (ex in the field of human rights) trying to impose “their way” to politics and development, without considering the specificities of the country in question.

    When asked where is the place of India in this dynamics, the Ambassador explicitly explained that although India is a liked country towards which they have a positive predisposition, what they need now is money, and China is the only one able to provide them what they need. He then added “If you can afford, come and buy!”.