President of Kazakhstan Nursultan Nazarbayev urged officials not to wait for a growth of oil prices and to develop new technologies and various economic spheres at a meeting in Almaty on Thursday. One such sphere could be the infrastructural sphere. However, in the context of Russia’s conflicts with Ukraine and Turkey, Kazakhstan has found itself in a transport trap.
The oil-and-gas export model of Kazakhstan failed when oil and gas prices fell. That is why it is quite difficult for the republic to implement programs of development of forced industrialization and building a new infrastructural environment in the context of volatility in raw material markets. Development of the transport sphere could be a way out of the situation. Transport projects are the most beneficial in crises. It could encourage economic growth in Kazakhstan and support it. Moreover, they have to start from scratch. A few years ago, the promising nature of the sphere was defined; and by the end of 2016 it is planned to start transportation through the whole Western Europe-Western China transit corridor. According to Amangeldy Bekov, the Minister for Investment and Development of Kazakhstan, despite the fact that the transit corridor hasn’t been put into commission officially, the cargo inflow has grown by 250 percent. “The transport corridor has started working and is bringing in revenues. It is expected that the mainline will provide about $300 million annually,” Bekov said at a press conference in Astana.
“Kazakhstan, a landlocked country, is interested in promoting itself as a transit country. However, the reality is that sea transportation is cheaper, and it will stay a priority for a long time,” Eduard Poletayev, the head of the public foundation of The World of Eurasia, told Vestnik Kavkaza. He thinks the transit capacities of Kazakhstan could be interesting for China, primarily, which is interested in delivering its goods to Europe as soon as possible – new models of mobile phones, clothes, and so on, i.e. everything that goes out of fashion very quickly. “However, it will be very difficult to use 100 percent of Kazakhstan’s land route capacities; and we shouldn’t expect caravans of trucks from China to Europe or vice versa,” Poletayev said.
Andrei Kazantsev, the Director of the Analytical Center of IMI MGIMO, thinks that “even though railway and vehicle routes are more expensive than the sea route, they are more strategically important and safe for China.” “By these means, Beijing diversifies routes of export and import operations, considering military and political strategic considerations,” Kazantsev told Vestnik Kavkaza. And this is a route not only to Europe, but also to Iran and the Middle East. “Kazakhstan has a chance to become a major transport junction for China. That’s why the head of China Xi Jinping announced the project of the Economic Belt of the New Silk Road for the first time in Astana rather than in any other place,” Andrei Kzantsev stressed.
However, the direction is also not cloudless. Kazakhstan feels uncomfortable about delivery of goods from third countries because of Russia’s conflicts with Ukraine, Turkey and Poland – the majority of goods come through the territory of Ukraine or from Turkey. Transit transportation of goods from Ukraine to Kazakhstan through Russian territory was a topic of a telephone discussion between the Prime Ministers Karim Massimov and Dmitry Medvedev. It is stated by the website of the Russian government. The heads of government discussed the current situation and prospects of development of trade and economic cooperation, as well as problems of implementation of the transit potential of the two countries. Due to the impossibility of driving Russian trucks through the territory of Poland, the route through the Zakarpattia Oblast of Ukraine began to be used intensively. However, last Thursday the Ukrainians blocked this route as well. In its turn, Russia banned the passage of trucks registered in Ukraine, the Ministry of Transport of Russia stated. The only exception was trucks which were travelling to Kazakhstan. At the moment, the Ukrainian and Russian sides seem to agree not to prevent vehicles’ movement. However, nobody can say how long the Russian-Ukrainian transport peace will last, enabling Kazakhstan to get its cargoes stably.
“Kazakhstan develops relations with not only the EAEU countries, but also at the level of bilateral relations; it is interested in elimination of the current conflicts,” Eduard Poletayev said. That’s why Nazarbayev addressed the heads of the member-states of the EAEU to “declare 2016 the year of strengthening the economic relations of the EAEU with third countries and the SCO.” Nazarbayev stressed that “any measures which are applied by the member-states individually toward third countries must not influence negatively other members of the integration process, including providing freedom of transit of goods on the territory of the EAEU.”
“Landlocked Kazakhstan has to cross at least one or several borders. So we are interested in doing this stably and comfortably. Moreover, Kazakhstan is quite dependent on imported goods. The program of import substitution is developing in Kazakhstan at a slower pace than it is developing in Russia. Furthermore, we have to import, because it is not always beneficial to produce them in our country. The Kazakh market is smaller than the Russian one. Any delay or a political conflict which turns into economic difficulties, embargoes or sanctions directly influence Kazakhstan’s consumers. That’s why Kazakhstan is interested in a settlement of the issues,” Poletayev concluded.
