| Kazakhstan | Feb 07, 2017
If the Astana peace talks are the biggest geopolitical story in the country's post-Soviet history, they shouldn't overshadow a less-sexy but equally important regional milestone: the recent strengthening of transportation ties with Iran.
Many rightly interpret the location of the talks as a sign of newfound Russian strength in negotiating an end to the war. That America was not invited (though its ambassador George Krol did sit in) and Iranian influence curbed at the table only reinforce this.
Should the talks succeed in ending the six-year war, Putin will reap the political benefits. But the name of Astana will also exceed that of Dayton (1995) and rival that of Paris (1973), Camp David (1978), and Belfast (1998) in the annals of recent peace accords.
If only these were the only tricks up Kazakhstan’s sleeve. The past few months alone have seen a bewildering array of economic, political, financial, and infrastructural developments that will shape the country’s outlook for years to come.
In a televised address on 25 January, long-time President Nursultan Nazarbayev announced a dramatic dilution of the president’s powers in favor of devolving them back to parliament. Promising a “democratization of the political system as a whole,” it was a paradigmatic moment in Nazarbayev’s political career.
Arguably the most successful post-Soviet republic outside of the Baltic states, Nazarbayev steered an impoverished steppe nation with a GDP per capita of USD1,650 in 1991 toward becoming a middle-class bastion of stability and multi-ethnic coexistence with a per capita GDP of USD25,700 by 2016.
With more than a quarter century in power, scarcely a post-Cold War leader can lay claim to governing with a steadier hand. This stability, of course, has been heavily reliant on the centralization of power in his person—a remedy for trying, transitional periods that can unfortunately sterilize political life and civil society once the object of centralization, peace and development, has been obtained.
If talk about devolution is real, it will be a bold and unprecedented step in post-Soviet Central Asian history. According to the president’s office, the proposed constitutional reforms will conclude by February 26.
As if to spice things up across the board, Nazarbayev’s political overture has also been accompanied by an economic one: on January 31 he stressed the need to trim the number of state-owned enterprises while increasing the number of public-private initiatives. That being said, calls for privatization were also matched by a commitment for more state-support to be given to domestic producers, in addition to the need for a unified IT-platform to systematize payments nationwide.
After a rough patch in April 2016 when Moody’s changed its outlook on the country to negative, Kazakhstani bonds also experienced a resurgence in the fall of 2016 when its 2024 and 2044 bonds outperformed US treasury bonds. This was largely the result of Fitch’s decision on October 31 to confirm the country’s BBB rating with a stable outlook, to the relief of many. As a partial result, Kazakhstan’s currency, the tenge, has also shown steady strength against the dollar, climbing from 380/dollar in February 2016 to 320/dollar by the end of January 2017.
Moscow to Mumbai
If the Astana peace talks are the biggest geopolitical story in the country’s post-Soviet history, they shouldn’t overshadow a less-sexy but equally important regional milestone: the recent strengthening of transportation ties with Iran.
During his state visit to Astana in December 2016, Iranian President Hassan Rouhani didn’t leave without hammering out a deal to form a dual-modal transportation company between Islamic Republic of Iran Shipping Line (IRISL) and Kazakhstan’s KTZ Express, a subsidiary of Kazakhstan’s state railway company. Created to facilitate the countries’ Caspian Sea trade through the construction of new port terminals and mutual investments in port facilities, the deal is part of a larger project, the North-South Transport Corridor (NSTC).
Intended in give southern Iranian ports access to Central Asia in the short term, in the long term it is hoped this network of road, rail, and port facilities will create a corridor between Moscow and Mumbai via Astrakhan (Russia), Baku (Azerbaijan), Tehran (Iran), and Bandar Abbas (Iran). Dry runs conducted in 2014 show that getting goods from Mumbai to Baku and Astrakhan, the two largest cities on the Caspian Sea, via Bandar Abbas would decrease shipping costs by 30% and delivery times by 40%.
If successful, the corridor would prove a formidable competitor to China’s parallel efforts to open up the Central Asian landmass through its China-Pakistan-Economic-Corridor project (CPEC). A gargantuan 2,400km project expected to cost USD54 billion, the CPEC would give the People’s Republic access to the Indian Ocean at the Pakistani ports of Gwadar and Karachi.
Though far from a zero-sum game, the fortunes of the world’s two most populous countries may someday lie in the neighboring Persian and Pakistani ports of Bandar Abbas and Gwadar. Since Russia has every interest ensuring an open line to Mumbai, the roles of Kazakhstan and Iran will be all the more crucial in decades to come.
This is not to confirm Halford John Mackinder’s notorious “Geographical Pivot of History theory,” which aimed to justify Britain’s mischief during the Great Game (the 19th century struggle between Britain and Tsarist Russia for mastery of Central Asia) by claiming:
He who rules the Heartland commands the World-Island;
He who rules the World-Island commands the world.
Rather, it is to confirm the growing importance of South-South and East-East ties in a world that slips further away from unipolarity by the day. Memorandums of understanding like those signed between Kazakhstan and Iran in December 2016 on reciprocal tourist travel, labor, social welfare, Caspian Sea shipping, and banking will be crucial for this new world, one for which the rules are still being written.
Salvo for Civilization, or Fodder for the Flame?
Churchill once wrote that “Cultured people are merely the glittering scum which floats upon the deep river of production.” Nonetheless, in a world torn asunder by the shattering first of a bipolar (1991) and second of a unipolar world (2003-), culture often becomes the most reassuring ground to tread upon.
As the ninth largest country in the world, Kazakhstan still aims for more than commercial and diplomatic coups. On the one hand, like other largely Muslim former Soviet republics, it has gone through a cultural limbo of sorts since the fall of Communism, unsure of whether to look east, west, north, or inward for late millennial inspiration.
On the other, it is the only Central Asian republic whose constitution is strictly secular and makes no mention of the ‘special place’ of Islam. As such, it retains the strongest cultural ties to Russia of any of the Stans. Hence the government’s rigorous recent efforts to bolster the arts, particularly opera and ballet. Contrast this with policy in neighboring Turkmenistan, whose first president Saparmurat Niyazov (d.2006) banned both opera and ballet for being out of tune with his country’s ‘national mentality.’
In 2015 Nazarbayev unveiled the Astana Ballet Theater, the crown jewel in the state’s multi-million dollar effort to bolster the public arts. In a glistening glass and steel structure, the second ballet theater to open in Astana in the past five years alone plays host to Kazakh national dance, classical, and contemporary ballet.
What’s more, its completion came only three years on the heels of the young capital’s first artistic venue, the USD320 million Astana Opera. And just next door to the 800-seat Astana Ballet Theater is the first certified professional choreography academy in all of Central Asia.
“The Soviet Union did two things very well,” a Kazakh-speaking woman said after attending a show at the new theater, “space exploration and ballet.” The fact that astronauts who want to visit the International Space Station can now only do so from the Baikonur Cosmodrome in southern Kazakhstan is an irony lost on none.
A Storm for All Seasons
Whether Kazakhstan’s growth can weather a long-term dip in oil prices remains to be seen. Its economy and currency have taken a beating with the collapse of black gold prices over the past three years, and its political system and stability are more than nominally dependent upon the vital organs of a single ageing man.
However, the country’s outlook is still strong. As long as its commercial, cultural, and intergalactic ties to Russia remain robust and it continues to open doors to the Persian gulf and Indian ocean, the country’s unique cultural, ethnic, religious, geological, and geopolitical makeup will make it a regional power to be reckoned with. With a little luck, this unique knack will continue to translate into prosperity.
“We have never copied foreign models of government,” Nazarbayev said as he addressed the nation in January, “although there are issues in which we have followed international experience.” Striking the right balance between these two is the elixir of all policy-making. And securing peace for Syria would not a terrible place to start.