Central Asia Digest | November 2023

Political Developments

On a visit to Kazakhstan, French President Emmanuel Macron in a meeting with Kazakh President Kassym-Jomart Tokayev, praised Kazakhstan for refusing to support Moscow in the Ukraine crisis. Kazakhstan has established itself as a major link in the new China-Europe trade route that circumvents Russia and as a substitute supplier of crude to European countries, cutting off Russian supply. In addition to oil, Kazakhstan is a significant exporter of uranium; France’s Orano already has a joint venture with Kazatomprom, the country’s state nuclear company. France is the fifth-biggest foreign investor in Kazakhstan, ahead of China, mainly because of the involvement of energy companies Total Energies in the massive Kashagan offshore oilfield project. 


Macron and Tokayev signed a series of contracts in sectors ranging from minerals and energy to pharmaceuticals and aerospace. The French energy firm EDF is in the running to build Kazakhstan’s first nuclear power station – a project that is due to be decided in a referendum. Macron added that ‘’France values … the path you are following for your country, refusing to be a vassal of any power and seeking to build numerous and balanced relations with different countries. I don’t underestimate by any means the geopolitical difficulties, the pressures … that some may be putting on you.” Tokayev praised France as a “key and reliable partner” and called Macron’s visit ‘’historic.’’ “We respect our friends, we are here when they need us and we respect their independence,” Macron said. “And in a world where major powers want to become hegemons, and where regional powers become unpredictable, it is good to have friends who share this philosophy.” 


Last year, Niger was only the second supplier of uranium to France. The first was Kazakhstan. But the developments in Niger prompted Macron to urgently schedule this visit to shore up its uranium supplies for the foreseeable future. It is Central Asian uranium that is of particular interest to France, which relies on nuclear energy to generate more than 60% of its electricity, the highest share of any country. In return, Kazakhstan is seeking French knowhow as it seeks to develop its own engineers and domestic nuclear power industry. Trade turnover between France and Kazakhstan reached 5.3 billion euros ($5.6 billion) in 2022 and Kazakhstan supplies around 40 percent of France’s uranium needs. Tokayev emphasized the importance of implementing new projects in the raw materials, agricultural, transport, logistics, healthcare, innovation, finance, and light industries, especially amid the complicated geopolitical and geo-economic situation. According to him, over 170 French companies are successfully operating in Kazakhstan to date, including Alstom, Total Energies, Orano, and Vicat. He noted an agreement that was also reached with Boehringer Ingelheim proposing to create a working group for promoting joint investment projects beneficial for both countries.


Regarding transitioning to a green economy and climate change, Tokayev announced Kazakhstan’s readiness to join efforts in the French One Planet Summit initiative. The two countries signed business agreements, including a letter of intent for a partnership in the highly sought-after sector of rare earths and rare metals. 


President Macron visited Uzbekistan after Kazakhstan – part of a two-day tour to boost France’s footprint in Central Asia, secure raw materials and counter China’s growing influence in the region. He used the trip to give his backing to Uzbek President Shavkat Mirziyoyev’s programme of opening the country up to global investors. “Uzbekistan is transforming. We must be there,” Macron said at the opening of a French-Uzbek business forum in the ancient Silk Road city of Samarkand. His visit came as European nations jostled for influence in the resource-rich region, where Russia, China, Turkey and the EU all have strategic and economic interests. Macron was accompanied by a delegation consisting of CEOs of France’s top energy companies, several of which are expanding their operations in Uzbekistan. “The French government has confidence in your strategy,” Macron told Mirziyoyev. “We believe in this policy. We encourage it and we want to participate in it.” The joint venture Nurlikum Mining – owned 51 percent by French nuclear giant Orano and 49 percent by Navoiy Uran, the Uzbek state-owned nuclear company – has been active in the country since 2018. Other French power corporations, notably EDF, Total Energies and Voltalia, have signed agreements aimed at bolstering Uzbekistan’s energy infrastructure, while engineering group Egis did a feasibility study for the tramway in Tashkent. In addition, the French Treasury is funding a water provision project in the arid region of Kashkadarya. Several French presidents have visited Kazakhstan since the fall of the Soviet Union, but Macron was the first to go to Uzbekistan since François Mitterrand in 1994.


Russia expressed concern over the West’s expanding diplomatic efforts in former Soviet Central Asian countries. Russia said that as a sovereign state, ‘’Kazakhstan is free to establish relations with any country’’ but Foreign Minister Sergei Lavrov claimed the West was attempting to drive Russia’s “neighbours, friends and allies” away from it. Kremlin spokesman Dmitry Peskov said Russia valued its relations with Kazakhstan “very highly.” Lavrov said: ‘’We have historical ties, ties of strategic partnership with Kazakhstan, they are our allies and our interests are united in many international bodies.” He added that alliances with the West could not be “compared with the benefits the Central Asian countries enjoy from cooperating with Russia … in sensitive areas such as border security, law enforcement training, and traditional security.” He claimed that Western countries were “funneling money and resources into equipment and technology supplied to these regions” in a bid to woo them, adding, “We openly discuss these matters with our Central Asian brothers.”


Kazakh President Tokayev paid an official visit to China for three days to participate in the Belt and Road Forum (BRF). The visit consisted of high-level meetings, strategic discussions, and agreements to enhance the ties between the two nations. During his visit to Beijing, Tokayev addressed the Belt and Road International Forum for Cooperation, the only leader from Central Asia to speak at the event.


At his meeting with Kazakh President on the sidelines of the BRF, President Xi Jinping of China said: “China is ready to work with Kazakhstan to further facilitate trade and investment, and implement key investment cooperation projects in production capacity.” He also promised that China would “strengthen connectivity” and expand the scale of railroad freight transport between the two countries. Xi added that the China-Kazakhstan agreement on mutual visa exemption would also soon come into force. Meanwhile Tokayev reaffirmed his country’s backing of the Belt and Road Initiative.


But it is Xi’s promise that China will boost the use of the Trans-Caspian International Transport Route (TITR) otherwise known as the Middle Corridor, and enhance the capacity, scale and efficiency of the China-Europe Railway Express that puts Kazakhstan firmly at the centre of the map – and at the centre of China’s ambitions in Asia and Europe. The two sides signed 30 commercial documents worth $16.54 billion. This adds to an investment pool of 52 projects valued at $21 billion, including significant projects such as the reconstruction of the Shymkent oil refinery, in which China National Petroleum Corporation (CNPC) has a stake and the establishment of the CaspiBitum enterprise in Aktau.


In his opening address at the BRF, Xi inter alia revealed that Beijing will build a new logistics corridor across the Eurasian continent linked by direct railway and road transport. “We will vigorously integrate ports, shipping and trading services under the ‘Silk Road Maritime’ and accelerate the building of the New International Land-Sea Trade Corridor and the Air Silk Road,” Xi said, while unveiling a 780 billion yuan (US$106 billion) financial package. 


At the Forum, China signed an intergovernmental agreement on the development of cooperation in the field of renewable energy sources with Uzbekistan. In essence, Beijing and Tashkent agreed to accelerate the transition to “green development” by building and modernizing components of power transmission networks for renewable energy sources. Additionally, the deal also presupposes the development of a scientific and technical base in the field of renewable energy sources.


With Turkmenistan, a number of bilateral documents were signed including the one on agreement on technical and economic cooperation. Moreover, a memorandum of understanding between the custom services of the two countries was signed. The Chinese side also signaled that active work is progressing on the fourth line (Line D) of the oft-mentioned China-Central Asia gas pipeline. The latter aims at transiting 30 billion cubic meters per year and is seen as a game-changer in the export capacity of Turkmenistan.


The total balance of trade with Central Asia remains in favor of China, which in the first six months of 2023 exported approximately US$26.4 billion worth of goods and services to Central Asia and imported US$13.5 billion. The agreements built upon the previous set of deals signed between China and the Central Asian countries during the China + Central Asia Summit in Xian in May, 2023.


Nine memorandums of understanding or projects were agreed with Kazakhstan, eight with Uzbekistan, three with Kyrgyzstan, one with Turkmenistan and one with Tajikistan, plus five Central Asian regional projects. There were two projects based around the Caspian Sea – the development of the China-Europe freight trains’ trans-Caspian transport route and the Aktau Port container hub project. This shows that Beijing is keen on developing the Middle Corridor that goes from China via Kazakhstan, the Caspian Sea, Azerbaijan and further to Europe. This was an alternative to the Northern Corridor that goes via Russia.


Turkish President Recep Tayyip Erdogan visited Astana, Kazakhstan for the 10th Summit of leaders of the Organization of Turkic States (OTS). He met with President Sadyr Japarov of Kyrgyzstan and Hungarian Prime Minister Viktor Orban. The OTS, formerly known as the Turkic Council, was founded in 2009 as an intergovernmental organization comprised of prominent independent Turkic countries working together to improve relations and union. Its members are Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan, and Uzbekistan, with observers Hungary, Turkmenistan, and the Turkish Republic of Northern Cyprus. Erdogan addressed a session of the summit, which was held under the theme of Turk Era.


Kazakh President Tokayev met the Hungarian PM Viktor Orban in Astana and expressed gratitude for his significant contribution to the rapprochement between the two countries. During the meeting in a narrow format, the sides discussed the state and prospects for the development of Kazakh-Hungarian relations with a focus on strengthening political dialogue, deepening trade and economic cooperation, and expanding cultural and humanitarian ties.


In an expanded-format meeting, the parties expressed mutual interest in developing contacts in energy, transport, logistics, metallurgy, manufacturing, agriculture, pharmaceuticals, food industry, and tourism.


According to Tokayev, Kazakhstan and Hungary have an excellent institutional basis for strengthening relations. In his opinion, the Intergovernmental Commission on Economic Cooperation and the Business Council should play an active role in promoting the development of trade relations.


“Despite the ongoing geopolitical tensions, last year, our trade turnover increased by more than 20%. I am confident that we have every opportunity to increase bilateral trade turnover to $1 billion soon,” he emphasized. Tokayev presented Orban with a state award – the Order of Dostyk (Friendship) of the first degree.


Economic Developments 


Kazakhstan will resume natural uranium deliveries to South Korea. Trade turnover between Central Asia-South Korea in 2022 increased to reach USD 8 billion. Over 70% or USD 6.1 billion is accounted for by Kazakhstan. South Korea ranks among top 10 largest investors in Kazakhstan. Over 30 large-scale investment projects worth USD 2 billion are being developed in Kazakhstan in machine building, transfer of latest technologies and knowledge, energy, medicine, etc. Besides, there is great potential in hydrocarbon supplies. Kazakh oil deliveries to South Korea doubled last year. Kazakhstan will also boost exports of products from the petrochemical, metallurgic, farm, and food industries. 


Turkmenistan is once again focusing on constructing a Trans-Caspian pipeline connecting its extensive gas fields to the European market to plug the gap left by Russian gas supplies to the Western nations. This concept has been under discussion since the 1990s but has faced persistent challenges in implementation. Addressing an energy forum in the capital city, Ashgabat, Turkmen leader Serdar Berdymukhamedov announced his country’s renewed interest in launching new energy projects, including the ambitious Trans-Caspian gas pipeline. Possessing the world’s fourth-largest natural gas reserves, Turkmenistan envisions the pipeline as a promising venture for supplying natural gas to European countries. The proposed pipeline, which would run beneath the Caspian Sea to connect with an existing terminal in Turkey, has encountered opposition from Russia, a formidable competitor in the global energy market as well. Concerns over the pipeline’s cost-effectiveness have also played a role in delaying its development. Turkmenistan has traditionally channelled most of its gas exports to China. 


The 16th meeting of the South Korea-Central Asia Cooperation Forum took place in Ashgabat, Turkmenistan. Foreign ministers from Korea, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, and Kazakh deputy foreign minister attended the meeting. The sides addressed cooperation in transport and logistics, healthcare and medicine, climate change and environmental protection, information and communication technologies, education and science, and tourism. The counterparts outlined their countries’ priorities and the interaction prospects between the Central Asian states and South Korea. Following the meeting, the parties signed a joint statement.


Kazakhstan’s trade ministry denied reports circulating in local media that the country intended to ban export of goods to Russia in connection with Western sanctions. In a statement, the ministry clarified that the recent decision to ban the sale of 106 types of goods to Russia had no connection to the sanctions imposed by Western countries. Addressing some concerns, the ministry’s press service clarified that the ban applied to certain “dual-use goods” subject to export control, which have been regulated in Kazakhstan for more than two decades in line with international export control regimes. With Western nations seeking to crack down on the re-export of sensitive goods by third countries to Russia, Kazakhstan’s leadership has vowed to comply with the Russian sanctions. Kazakhstan has also sought to distance itself from Russia’s invasion of Ukraine and has not recognized the partially occupied regions of Ukraine as part of Russia.


During recent visits to the United States and Germany, Kyrgyz President Sadyr Japarov encouraged investors to participate in the China-Kyrgyzstan-Uzbekistan (CKU) railway project — a crucial component of Xi Jinping’s ambitious Belt and Road Initiative. Kyrgyzstan is in great need of cash to build its part of the railway project — expected to cost a few billion dollars — that could bring it big profits. Despite assurances given by Kyrgyz authorities on the imminent start of construction, the key question of financing remains unanswered, with the participating countries still trying to determine the various funding models and sources for this massive undertaking. The project is fully prepared, but as of now, Beijing, Bishkek, and Tashkent have not arrived at a mutual agreement concerning the financing aspects, particularly the distribution of funding responsibilities. Although China possesses the capability to undertake the construction unilaterally, the railway project does not currently occupy a position of top priority for it.


Administrator Samantha Power traveled to Uzbekistan from October 23rd-24th to convene the first C5+1 Regional Connectivity Ministerial and emphasize the U.S. government’s commitment to the independence, sovereignty, and prosperity of the countries in the region. Since 2015, C5+1 has served as the U.S. government’s primary diplomatic platform for engaging Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. The development ministerial seeks to enhance this platform by convening Ministers from all five countries to take concrete actions to drive inclusive, sustainable economic development in Central Asia, with a focus on regional connectivity, trade, economic growth and entrepreneurship, climate and energy solutions, and opportunities for youth.


The main topic dominating the international agenda currently is the conflict between Israel and Hamas. Kazakh President expressed the country’s firm condemnation of any terrorist attacks in the region, stressing that targeting innocent civilians can never be justified, regardless of the circumstances. At the same time, while acknowledging Israel’s pivotal role in regional dynamics, Kazakhstan upholds a consistent view on the Israeli-Palestinian dispute. It staunchly supports the two-state solution, asserting that both Israelis and Palestinians deserve to reside within safe and acknowledged boundaries, coexisting peacefully. 


The European Union (EU) supports Kazakhstan’s aspiration to become a transportation and logistics hub. The EU offers participation in infrastructure projects and the attraction of private investments to help Kazakhstan achieve this goal.


According to Kazakh Ministry of National Economy, trade turnover between Kazakhstan and China between January and August hit $19 billion, 22.6% higher compared to the same period in 2022. China accounts for 21% of the country’s foreign trade turnover. Exports from Kazakhstan to China increased by 2.1% to $9 billion in this period, largely driven by supplies of copper ores and concentrates ($1.7 billion), uranium ($553.1 million), wheat ($110.2 million) and barley ($102.4 million). Imports to Kazakhstan from China increased by 49.5%, reaching $10 billion. In 2022, Kazakhstan accounted for 45% of China’s $70.2 billion trade with the five Central Asian countries.


China is also among the largest foreign investors in Kazakhstan. Gross foreign direct investment inflows from China reached $748.3 million in the first half of 2023, up 30.6% compared to the same period in 2022. This figure is the highest since 2019 when $789 million was invested in six months. China’s share in gross FDI inflows is 5.6%. A significant portion of investments come from CNPC, which is involved in the development of hydrocarbon deposits in the Aktobe Region, construction of the Kazakhstan-China main gas pipeline, and has stakes in oil fields in the Mangistau Region and in the Shymkent refinery.


Kazakhstan forged new co-operation and financing agreements with partners in China for its oil and gas assets, capitalising on the lack of progress on a gas pipeline between Moscow and Beijing. 


The Kazakh Ministry of Water Resources and Irrigation and the German Society for International Cooperation (GIZ) signed an agreement to implement the regional program on water resources management in Central Asia considering climate impacts. The program, encompassing Afghanistan, Germany, Kazakhstan, the Kyrgyz Republic, Uzbekistan, Tajikistan, Turkmenistan, and Uzbekistan, is part of Germany’s Green Central Asia regional climate and security initiative. The deal is valid until February 2027. The program will develop measures to improve water use efficiency in the region, implement pilot projects for water resource management considering climate impacts, and adapt the Amu Darya and Syr Darya river basins to climate change. 


Officials in Uzbekistan said a government delegation will travel to Afghanistan in the coming months to conduct negotiations over an ambitious canal project that is sparking deep concern over water security in the region. This announcement came on the heel of news that the Taliban-run government in Kabul is poised to start work on the second phase of the Qosh Tepa canal, which has been billed by Afghan officials as a way for Afghanistan to ensure its own farming needs. Afghan officials said that they are ready to discuss the matter with their neighbours if they had any concerns. This was however followed by a warning from the Afghan Acting Defence Minister said that Taliban’s armed forces would forcefully resist any aggressive efforts to stymie the project. Kabul’s hope for Qosh Tepa is that once complete, the 285-kilometer canal will be used to provide irrigation to 550,000 hectares of now-arid farmland.


India-Central Asia Relations 


External Affairs Minister (EAM) Dr S Jaishankar visited Kyrgyzstan, from 25–26 October to represent India at the 22nd meeting of the Shanghai Cooperation Organisation (SCO) Council of Heads of Government (CHG), held under the Chairmanship of Kyrgyzstan. EAM highlighted four key points in his address at the conference. First, he suggested that SCO should focus on promoting the region’s stability and prosperity by adhering to international law, respecting the sovereignty and territorial integrity of member-states, and encouraging economic cooperation among them. This was a pointed message to China and Pakistan and veiled criticism of the way the Belt and Road Initiative (BRI) has evolved during the past decade. Second, the minister stressed India’s deep civilizational and cultural ties through history with the region’s people. Third, he reiterated that a high priority should be accorded to expanding connectivity between India and the region, especially given the centrality of Central Asian states. He spoke of the International North-South Transport Corridor (INSTC), along with the recently launched vision of the India-Middle East-Europe Economic Corridor (IMEC), as potential “prosperity enablers.” Finally, he recalled how, with much interest and careful preparations, the Indian presidency of the SCO had focused attention on five new verticals of cooperation: Startups and Innovation, Traditional Medicine, Science and Technology, Youth Empowerment, and Shared Buddhist Heritage. 


A total of 14 documents were approved by the Council covering a wide array of administrative, budgetary, and financial activities of the grouping. 


Indian National Security Adviser (NSA) Ajit Doval called for stronger action against terrorism and for better connectivity between New Delhi and Central Asia in a meeting with his regional counterparts in Kazakhstan. Attending the second meeting of the India-Central Asia Secretaries/National Security Advisers of the Security Councils, NSA outlined India’s commitment to enhancing cooperation with Central Asian nations on multiple fronts. However, he claimed that a “particular country” is responsible for preventing direct links between New Delhi and the region, a veiled reference to Pakistan. Doval said that the absence of direct land access between Central Asia and India is an anomaly. ‘’This absence of direct connectivity is the result of a conscious policy of denial by a particular country. This situation is not only self-defeating for this country but it also reduces the collective well-being of the entire region,” he said. NSA emphasized direct connectivity as a priority for India, but at the same time noted “it is important to ensure that connectivity initiatives are consultative, transparent, and participatory.” In an apparent swipe at China’s Belt and Road Initiative (BRI), NSA added that initiatives “should respect sovereignty and territorial integrity of all countries. They should also adhere to environmental parameters, ensure financial viability, and not become debt burdens.” Noting that India is a member of the International North-South Transport Corridor (INSTC), a 7,200km (4,473-mile) multi-mode transit system that will connect ship, rail, and road routes for moving cargo between India, Iran, Central Asia, and Russia, and which has been touted as an alternative to the Suez Canal, NSA invited Central Asian states to use the Iranian port of Chabahar, where an Indian company operates the Shahid Beheshti terminal. He emphasized that with Uzbekistan and Turkmenistan soon joining the INSTC, all five Central Asian states will be part of the upcoming corridor that will boost India’s trade ties with the region.  NSA also reiterated New Delhi’s stand on terrorism stating that that any act of terrorism, regardless of its motivation or cause, is unjustifiable. He noted that the meeting in Kazakhstan was being held at a time of significant challenges for the world, and insisted that diplomacy must be at the center of all conflict resolution initiatives. Noting that the situation in Afghanistan remains a cause of concern, NSA stressed the need to form a truly inclusive and representative government, combating terrorism and drug trafficking, and preserving the rights of women, children, and minorities. He emphasized the importance of cooperation in Afghanistan for the establishment of an inclusive government, the eradication of terrorism, and the promotion of women’s and all Afghan rights. He emphasized that the current crisis in Afghanistan and its ongoing nature will lead to instability in both the country and the region. He stressed the need for concerted efforts to address the situation comprehensively, highlighting that resolving the Afghanistan crisis requires collaborative actions to establish stability, promote peace, and ensure the rights of all Afghan citizens. Referring to financial support from an Indian company “Amul” to the Afghan cricket team participating in the Cricket World Cup, he stated, “India will continue its assistance to Afghanistan, as it always has.” India offered fully funded capacity-building programs in a range of areas to tackle both terrorism and drug trafficking. 

Ambassador Ashok Sajjanhar

Former Ambassador of India to Kazakhstan, Sweden and Latvia; President, Institute of Global Studies and Distinguished Fellow, Ananta Centre Ambassador Ashok Sajjanhar belongs to the Indian Foreign Service and has acquitted his responsibilities in the diplomatic service for 34 years. He was Ambassador of India to Kazakhstan, Sweden and Latvia and has worked in senior diplomatic positions in Indian Embassies/Missions in Washington DC, Brussels, Moscow, Geneva, Tehran, Dhaka and Bangkok and also at Headquarters in India. He negotiated for India in the Uruguay Round of Multilateral Trade Negotiations and in negotiations for India-EU, India-ASEAN and India-Thailand Free Trade Agreements. He contributed significantly to strengthening strategic ties and promoting cultural cooperation between India and USA, EU, Russia and other countries.Ambassador Sajjanhar worked as head of National Foundation for Communal Harmony to promote amity and understanding between different religions, faiths and beliefs. Ambassador Sajjanhar has been decorated by Governments of Kazakhstan and Latvia with their National Awards and by Universal Peace Federation with Title of ''Ambassador of Peace.'' Currently Ambassador Sajjanhar is President of Institute of Global Studies, New Delhi. He writes, travels and speaks extensively on issues relating to international relations, foreign policy and themes of contemporary relevance and significance. He appears widely on TV panel discussions. Ambassador Sajjanhar is interested in reading, music and travelling. His wife Madhu is an economist and an educationist. They have a son and a daughter both of who are accomplished singers. Their son passed out of Yale University and their daughter is pursuing her PhD at University of Minnesota.

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