Kazakhstan has officially begun construction of its third railway connection with China. The double-track railway is expected to boost freight capacity between Kazakhstan and China by more than two-thirds, from 28 to 48 million tons per year. With completion expected in 2027, the railway will also relieve congestion at the two existing border crossings, part of a 1300 km railway line investment by the Kazakh government.
This bodes well for China, which has pumped billions of dollars into its famed Belt and Road Initiative (BRI). On this New Silk Road, Kazakhstan is positioned to act as a pivotal transit hub and a secure land corridor, circumventing the uncertainties associated with maritime passages. Consequently, Kazakhstan’s prominence in global trade has steadily increased, unveiling markets to millions of potential consumers. Presently, China stands as Kazakhstan’s primary economic and trade ally.
“Together with President Xi Jinping, we have embarked on a new era of ‘golden’ relations between Kazakhstan and China, a partnership spanning 30 years. Last year, two visits to China further solidified this partnership,” said President Kassym-Jomart Tokayev in a recent interview for the Egemen Qazaqstan newspaper, adding that Kazakhstan can “also collaborate within multilateral frameworks to ensure regional stability and international security.”
“The strategic goal is to double our GDP by 2029,” he stated optimistically.
The bilateral trade volume between Kazakhstan and China has experienced unparalleled expansion, surging to an unprecedented $32.7 billion during the initial ten months of 2023. Vigorous efforts are underway to diversify exports and augment shipments to China. Furthermore, China now stands as one of the most significant contributors to Kazakhstan’s economic development, with cumulative investments since 2005 reaching a substantial $24 billion.
Kazakhstan’s strategic geographical position, situated between the East and West, while also sharing a border with China, presents extensive prospects for the transit of Chinese goods. Implementing a visa-free regime between Kazakhstan and China is vital, as Kazakhstan’s citizens are now exempt from visa requirements when visiting China.
However, long delays are reported at some land border crossings. Trucks crossing the Nur Zholy border checkpoint spend an average of eleven days waiting, according to the Atameken National Chamber of Entrepreneurs. These trucks are often subjected to repeated inspections by customs officers “without explanation,” the business group said, citing complaints from drivers. To address the issue, officials recently began operating the Nur Zholy checkpoint on a twenty-four-hour basis. On a positive note, following corruption and abuse of power charges, it was reported that a former director of Kazakhstan’s Border Service, Darkhan Dilmanov, was convicted of “abuse of power” and received a four-year prison sentence for participating in a scheme involving the illegal transportation of goods from China to Kazakhstan.
However, it’s not only about China. According to International Monetary Fund analysts, Kazakhstan’s 2023 GDP is expected to exceed $259 billion, marking a fifteen percent increase from 2022, the highest nominal growth in Central Asia. Positive dynamics are also evident in GDP per capita, which is forecasted to reach almost $13,000. According to one estimate for 2028, this figure is expected to grow by a third, reaching $16,800.
Yet, the country still needs to carry out numerous economic and political reforms to attract foreign investors, including implementing large industrial projects and loosening foreign investment regulations. “The crucial task of attracting investment, including through privatization and asset recovery, also needs to be addressed,” said President Tokayev in his interview. This is at the core of his economic vision to double the nation’s GDP by 2029.
Kazakhstan is expected to trim its State-Owned Enterprises (SOEs) through privatization. These relics of the Soviet planned economy have long been identified as a drain on the economy and an impediment to business efficiency. However, dislodging them is earlier said than done. The government has already begun pushing back against SOEs in areas outside of the economy.
Kazakhstan is also expected to accelerate its economic disengagement from Russia, albeit gradually. The economic realities of sharing the second-longest shared land border in the world with Russia suggest that Kazakhstan, even as it complies with sanctions and redoubles efforts against smuggling, will still trade with Russia while attempting to reduce its dependency. These attempts will mainly rest on ensuring the expansion of the Trans-Caspian Energy Corridor, also known as the Middle Corridor, over the Caspian Sea to the West via Azerbaijan and Georgia. Kazakhstan would no longer be vulnerable to Russia strangling its imports or exports while also working to diversify its economy and attract tourists.
Strengthening the rule of law, independent media, and political reforms is necessary on the political level. The country has recently given the Human Rights Ombudsman constitutional status and tasked it with monitoring human rights violations and civil liberties. President Tokayev dismisses any claims of imprisoning political dissidents and adds, “Censorship, special laws, and penal institutions are the main signs of political persecution. There is nothing of this kind in modern Kazakhstan. There is not a single decree, law, or other normative document in our legislation under which citizens could be persecuted for their political views.”
In recent months, the country has taken steps to prevent sanction-evading companies from operating on its territory. Kazakh television operator TVCOM says it has stopped broadcasting several stations launched by Russian state-run Channel One to reduce the share of foreign news channels on the local market.
The country’s leadership has devised a long-term strategy to overcome the Soviet transport and transit dependency legacy and chart an independent political and economic policy. Kazakhstan’s foreign policy endeavors to diversify the country’s trading partners to avoid overreliance on any player in the global economy. However, the sheer size of the Chinese economy and its hunger for raw materials risk substituting Moscow with Beijing as the regional hegemon and frustrating Kazakhstan’s attempts at converting from an oil and gas-dependent to a more diversified economy.
Despite the strategic significance of Central Asia and the Caspian Basin, Western countries have not paid sufficient attention to the region. This is due to a combination of factors, including the absence of a shared strategic framework for stabilizing and developing the heartland of Asia, an insufficient focus on consolidating close political ties with key countries in the region, and opposition of other major powers competing for influence in Central Asia. Kazakh leaders support an increased American and European role in Central Asia to help promote the region’s security and economic development without undermining Astana’s multi-vector foreign policy approach.
Between Russia and China, as well as Iran and Turkey, Kazakhstan is at the center of large flows of people and goods, including oil and gas transit, which may provide a first geopolitical weight across the region. It is a massive landlocked country equal to the size of Western Europe, dwarfing the other former Soviet republics of Central Asia in terms of land mass, with a border of more than 7,800 kilometers with Russia and 1,783 kilometers with China.
Nevertheless, the future viability of Kazakhstan’s foreign policy will depend as much on Kazakhstan’s own policy choices as on the broader developments in the outside world. While Russia is likely to continue to be the dominant political actor in large parts of Eurasia, with China likely to continue to invest in Central Asian energy and infrastructure projects, the success in maintaining—and in the process keeping the heart of Eurasia open—will depend on the readiness of Western and Asian partners to engage with the region.
Harun Karčić is a journalist and political analyst covering the Balkans and Turkey. Over the past decade, he has authored numerous articles on Islam and foreign influence in the region, including Saudi, Iranian, Turkish, Chinese, and Russian. He also regularly reports on Muslim minorities in Europe and rising right-wing nationalism. His Twitter is @HarunKarcic.
Image: Vladimir Tretyakov / Shutterstock.com.