Astana stops resisting Russian plans to expand the CU and form the EEU
By Victoria Panfilova, an NG commentator, exclusively for Vestnik Kavkaza
Russian and Kazakh Presidents Vladimir Putin and Nursultan Nazarbayev met in Yekaterinburg and signed a package of bilateral documents, including a new good-neighbour and cooperation treaty for the 21st century. Then, the Russian leader went to Vietnam, a state willing to form a free trade zone with the Customs Union (CU). Experts say that the Vietnam policy on the Customs Union means that leaders of Russia and Kazakhstan managed to resolve their differences about expansion of the CU and formation of the Eurasian Economic Union (EEU).
The tone of the meeting in Yekaterinburg was completely different from the tone of the recent summit of the heads of Russia, Kazakhstan and Belarus in Minsk. Back then, Nursultan Nazarbayev accused Moscow and Minsk of forming trade barriers within the framework of the Common Economic Space and politicizing the work of the Common Economic Commission (CEC) dominated by Russia. Moreover, the Kazakh leader spoke out against the expansion of the CU and clarified that Russia had started making profit from the Customs Union while Kazakhstan was suffering from losses.
Vladimir Putin made an outrunning maneuver in Yekaterinburg by announcing that trade-economic relations of the two states had improved: “That said, trade flow of Kazakhstan to Russia increases much faster than Russian flows to Kazakhstan.” The Russian president referred to numbers whenever Nazarbayev tried to object. The ‘incident’ could have been forgotten after Putin’s announcement that Russian investments in Kazakhstan totaled about a billion dollars and Kazakh investment in Russia totaled $1.7 billion. This is when Astana’s ‘soft resistance’ of Russian plans to expand the CU and form the EEU ended, whether temporarily or permanently. Thus, the documents signed may be regarded as proof that Astana was devoted to Eurasian integration and had little to no discords over the issue.
Alexander Knyazev, an expert of Central Asia and the Middle East, assumes that Kazakhstan’s pretensions towards Russia were resolved via non-economic benefits. “For example, it is unlikely that Russia is happy with transit of US military cargo through the Aktau Port of Kazakhstan. But this is a fact, it seems, that has taken place and it doubtlessly demands explanations to the ally and concessions in certain matters. Moreover, unification of the Russian and Kazakh air defenses is being decided now. With account of Russian power in the field, Kazakhstan may reduce military expenses. Bilateral relations of the two states in the process of integration are diverse, many-sided and readiness for mutual concessions in this case proves mutual understanding and progress rather than a standstill in a certain problem,” Knyazev told Vestnik Kavkaza.
Kazakhstan has gained a lot in the economic field: it signed agreements to form joint ventures to produce petroleum equipment, technical service and maintenance of armored vehicles, formation of the Russian-Kazakh joint venture Azia Avto Kazakhstan, where AvtoVAZ is the key technological partner. This, by the way, is the full-cycle car factory in Kazakhstan. Almost all Russia’s major business has recently come to Kazakhstan, including Rosatom, Roscosmos, Gazprom, LUKOIL, RUSAL, AvtoVAZ, EuroChem, TMK, Sberbank, Alpha-Bank, Rosselkhozbank, Promsvyazbank, SANNA Group. According to Knyazev, little is said about over 600,000 Kazakh workers in Russia, when the employable population of Kazakhstan consists of 8-9 million people.
Pumping of Russian oil to China through the Atasu-Alashankou Pipeline was almost the most highlighted decision. The volume of oil pumped may reach up to 7 million tons a year, compared with only 1 million tons a year through the Baku-Tbilisi-Ceyhan Pipeline and at less favorable conditions than Rosneft wanted.
“The problem of expanding the Customs Union is trilateral. The cautious attitude of Kazakhstan to the issue is clear, but as far as I know, there are only talks about Armenia. The road map for Kyrgyzstan may stay under consideration for years. Tajikistan is just waiting. All other candidates – Syria, Vietnam and etc. – are named for a more agitational purpose than real motivations. There are just too many concerns about them, if we take a realistic glance,” noted Alexander Knyazev.
Although Vietnam, it seems, is interesting for Russia for several reasons. In particular, Putin wrote an article for Vietnamese mass media before making the visit, according to Interfax. In it, he pointed out that the formation of a free trade zone would double Russian-Vietnamese trade turnover by 2015 and boost it to $10 billion by 2020. “Accomplishment of this goal could have been carried out by signing a free trade agreement between member-states of the Customs Union and Vietnam. This meets the logic of political and economic integration in Eurasia and the Asian-Pacific Region,” noted Putin. Judging by his words, talks on formation of a free trade zone have already started and the Russian president hopes to see them succeed.
Putin also said in the article that he wanted to open a Russian-Vietnamese center for nuclear science and technology. Rosatom plans to build the first nuclear power plant in the Ninh Thuan Province. Russia plays a very important role in the fuel and energy complex of Vietnam. The volume of oil extracted by Vietsovpetro, a joint Russian-Vietnamese venture, has reached 206 million tons and income has totaled tens of billions of dollars. Rosneft and Gazprom are actively developing in Vietnam. Russian military industry is starting licensed production of modern equipment. Russia is interested in the Cam Ranh Port, an area where the US used to have a military base. Soviet and Russian warships established a presence at the port after the US.
