Kazakhstan’s friendship with China has been rewarded with massive investment, and the Central Asian nation now regards itself as the buckle on the Belt and Road trade route connecting China with its lucrative European market. As trade flows Kazakhstan’s economy is growing but, contend Duncan Bartlett and Alice Jackson, there’s a long way to go before it achieves its goal of becoming a modern, middle-income country
Kazakhstan’s railways are a proud symbol of its ambition to be at the centre of international trade. One could, if one wished, travel by train from the Dzungarian Gate on its Eastern border, all the way down south to China’s prosperous Yangtze region. Or one could go several thousand kilometres westwards to the German city of Duisburg, the world’s largest inland port.
Only a few privileged people undertake such epic journeys. They are usually seated in the cabin of locomotives, which pull lengthy goods trains from China to Europe. About 40 such trains pass through Kazakhstan each week, a halfway point on a journey which takes about a fortnight to complete. A similar trip by sea takes more than a month. That places Kazakhstan in a strategic position, at the centre of one of the world’s most important trade routes.
As a result, Chinese investment has flowed into Kazakhstan, funding railway tracks, stations, landports and depots. At the same time, people-to-people relations have deepened: many ethnic Chinese have moved to Kazakhstan and many Kazakhs live in China.
Wilder Alejandro Sanchez, an analyst who focuses on geopolitical, military and cybersecurity issues, says: ‘Because of its unique geographical position, Kazakhstan has to conduct a careful foreign policy. It is far from Europe and far from the United States. It has a border with China on one side and a border with Russia on the other, so it must balance relations with Beijing and Moscow carefully. It cannot afford to antagonise either global power.’
Kazakhstan is the world’s biggest producer of uranium, the key component of nuclear power generators and nuclear weapons. That provides plenty of customers but it is the Chinese who offer the prized investment money.
The country’s President Nursultan Nazarbayev makes frequent visits to Beijing to meet with his counterpart Xi Jinping. With the aim of Kazakhstan being among the world’s 30 most developed countries by 2050, he hopes that the Chinese investment will help boost the economy and lift the income of his citizens to similar levels enjoyed by people living in central Europe.
It is predicted that Kazakh GDP will grow by around 4 percent this year. While the poverty level is low, income inequality is marked, particularly between the wealthy urban elite and the rural poor.
The President has pledged to raise spending on healthcare, science and education, and there will be a particular focus on learning English. Schools are now teaching children to write using Latin letters as well as the Cyrillic alphabet, which should make life easier for users of computers, particularly people who write code.
Alongside greater educational achievement comes greater aspiration. The country is trying to avoid a brain drain. Its Vice Minister for Labour and Social Protection, Nurzhan Altayev, has said that although migration is not a major problem, in a nation of 18 million citizens– and with global aspirations – it is important to encourage people, particularly the young,to commit to life in their home country.
The government has established a scholarship programme, called Bolashak, which enables bright students to travel abroad to study for four years – after which they must promise to return home and use their talents to serve the country.
The Russian factor
Kazakhstan’s rich natural resources include not just uranium but also considerable reserves of oil, coal and natural gas, alongside significant deposits of zinc and lead. As it has limited capacity to process any of these materials domestically it relies on other countries to buy the commodities and refine them. Russia has long been a key economic partner in this process and the Russian language is widely understood.
Yet Kazakhstan is keen to diversify beyond the extractive industries. As former Foreign Minister Roman Vassilenko noted: ‘As we seek to further modernise, we naturally need to strengthen our efforts to attract a diversified range of foreign investments and technologies as part of mutually beneficial partnerships.’
President Nazarbayev encourages further market-oriented reforms. He also tries to balance the quest for modernisation with his effort to maintain warm relations with both the Russians and the Chinese. Domestically, he faces no significant political opposition and his autocratic approach constrains press criticism. However, at 78 years of age, he may not be able to maintain complete control for much longer.
According to Wilder Alejandro Sanchez, ‘It is widely speculated that this could be President Nazarbayev’s last term in power and there is even talk of early elections. The question is whether his successor will be handpicked, and how this future leader will shape Kazakhstan’s domestic and foreign policies and priorities.’
Mr Sanchez also asks whether the next President will be as committed to reform as Mr Nazarbayev. ‘Will the person who follows him stick to the modernisation goals, or will they take a 180-degree turn and follow a completely different approach?’
The most likely outcome is that whoever takes power after President Nazarbayev will pledge to spur further economic development, as well as to burnish the country’s internal image.
‘In a sense the country has been very successful,’ says Mr Sanchez,‘considering where it came from following independence in the early 1990s. There’s a great deal of stability and there is also patriotic pride in being Kazakhstani. Whenever I talk to my friends, they are always keen to point to their homeland’s numerous achievements in the past couple of decades.’