On May 29 Kazakhstan, Belarus and Russia signed into existence the Eurasian Economic Union (“EEU”), set to come into force in January 2015. The EEU’s aim is the economic integration of ex-Soviet countries, based on a European Union-style collective model. It builds on the Customs Union, signed in 2010, which implemented a common customs territory and removed internal border controls between the three states. Against the backdrop of a shifting geopolitical landscape sparked by events in Ukraine, and strengthening Russian and Kazakh bi-lateral relations with China, the original vision of the EEU may no longer be viable. Although they wish to show they have a diversified partner base, Kazakhstan and Russia also want to avoid perceptions of any overt economic threat to its shared Chinese partner. This is particularly relevant to Kazakhstan, which has in fact suffered economically from the initial implementation of the Customs Union, as laid out below.
China’s President Xi Jinping (left) and Kazakhstan’s President Nursultan Nazarbayev look on next to an honour guard during a welcoming ceremony at the eve of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai. Photo: Reuters
The Conference on Interaction and Confidence Building Measures in Asia, which begins today in Shanghai, largely passes unnoticed most years. But this year it is being touted as a major global event, largely due to Russia’s current awkward relationships elsewhere and China’s growing global profile.
It also offers a window into President Xi Jinping’s vision for China’s foreign policy.
After years as Eurasia’s energy bully, Russia’s state-controlled natural gas monopoly, Gazprom, is getting a taste of its own medicine. Even as Gazprom seeks to build the tallest skyscraper in Europe as its new headquarters in St. Petersburg, pressure from Russia’s neighbors led to a 15 percent decline in the company’s profits last year, eating into the state budget. Moscow’s single-minded focus on gas exports in an effort to become, in the words of President Vladimir Putin, an “energy superpower” has crippled its ability to adapt to profound changes in the global energy landscape — from the shale gas revolution in North America to the dynamism of new market players such as Azerbaijan. Having spent the last decade making enemies in Central Europe and Central Asia, Gazprom and Russian decision-makers are now reaping what they have sown. Continue reading →
Last month, Russia was reportedly ready to provide weapons worth $1.1 billion to Kyrgyzstan and $200 million to Tajikistan along with a further $200 million in petroleum products. In early June, China offered $10 billion through the Shanghai Cooperation Organization (SCO) to Central Asia. India has been focusing on developing a strategic partnership with Tajikistan since September, while the US always develops a stronger relationship with Uzbekistan.
There is a sense that we are returning to the “Great Game” in Central Asia. But this focus on abstract theories misses hard realities on the ground. Outside powers invest in Central Asia to advance their individual national interests, not out of a strategy directed against other powers. Continue reading →
On the surface, this week’s Shanghai Co-operation Organisation (SCO) summit will be another marker in the organisation’s steady development as a serious player in regional and, increasingly, international affairs. Below, however, a growing tension between China and Russia is starting to show.
The two powers increasingly see their interests diverging in Central Asia. They are close allies in the UN Security Council, but on the ground China and Russia are steadily moving in different directions.
And it would seem that the SCO is not the only reason for his visit. In initial discussions, the summit was to be held in Shanghai. But, primarily at Moscow’s instigation, the decision was made to hold the conference in Beijing. Given that this was Putin’s first visit to China in his new role, he was eager to ensure that it was held in the capital so he could combine the summit with a state visit to Beijing, highlighting the importance of the bilateral over the multilateral in Russian minds.Russia’s hesitation with the SCO is observable in several ways, not least in President Vladimir Putin’s travel schedule. His first foreign visit since regaining the reins of power took him to Belarus, Germany and France, before coming to China this week.
Vladimir Putin’s return to the presidency in Russia was predictably controversial in Europe and America. In Beijing, the official read-out provided by Xinhua highlighted a positive conversation, with President Hu Jintao stating with “confidence that Putin’s new presidential term would see faster progress in building a stronger and richer nation”. That statement affirmed the importance of the Sino-Russian axis as a pole in international relations. Putin, the quintessential Russian chess master, has a very clear sense of where Russia’s future must lie, and needs Beijing onside if he wants to carry this out.
The Sino-Russian relationship has had its ups and downs. As Putin put it recently, “there are some sources of friction”. The joint Chinese-Russian veto last month of a UN resolution on Syria attracted attention. But, beyond this, tensions persist as Russia proves implacable in discussions over energy pricing, and tries to develop a “Eurasian Union” to counter China’s successful inroads into Central Asia. The resultant price increase is detrimental to Chinese interests and delays economic integration under the auspices of the Shanghai Co-operation Organisation (SCO).
Last week’s Shanghai Cooperation Organization (SCO) Summit in St. Petersburg, Russia was unsurprisingly uneventful. While not a “head of state” summit — where traditionally big announcements like the decision to allow new members in would be made — in the lead-up to the meeting there was a flurry of press about a possible enlargement of the group. But aspirant members and current observers India and Pakistan were not made into full members, and Afghanistan was once again not brought any closer into the club. Generally seen by Western observers as a less threatening entity than before, the organization’s inability to move forward on expansion highlights its immaturity and should show outsiders the likely limited role that it will be able to play in post-American Afghanistan.
There is a sense in Kyrgyzstan that the United States is on its way out. It is a worrying prospect when one considers that almost a fifth of its gross domestic product comes from the U.S. “transit hub” for Afghanistan at Manas Airport, outside the capital, Bishkek. Against this backdrop, Secretary of State Hillary Rodham Clinton made a visit to neighboring Tajikistan and Uzbekistan last month to highlight how America has a strategy for the region, post-Afghanistan. Such a strategy is essential to lay out now if the United States does not want to leave a regional vacuum that allows a poor region to fall further into disaffection and economic uncertainty.
It was a grim, grey Beijing morning as we fought with our taxi driver and traffic to make it to a meeting at one of China’s many official think tanks. We had set up the meeting with the intention of discussing Chinese foreign policy in her western periphery, Central Asia, but were instead asked to present on the pending Western withdrawal from Afghanistan.
Trying to shift things back in our direction, we offered a brief presentation on the view increasingly shared in Western capitals that regional powers and the Shanghai Cooperation Organization (the Chinese-instigated regional grouping encompassing nearby Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Russia) could take on a greater role in ensuring post-withdrawal Afghan stability.
In response, we were told that our perspective was exclusively Western; we needed to see things from an Asian point of view. Continue reading →
An outpost of the China Road and Bridge Corporation (CRBC) responsible for repaving the Southern Transport Corridor highway in Kyrgyzstan from the city of Osh through Sary Tash to the Irkeshtan border with China. Photo by Sue Anne Tay.
BEIJING — Traffic around Tiananmen Square was even worse than usual last week as President Vladimir Putin rolled through town to cement the supposedly flowering Chinese-Russian relationship. A series of high-level deals were signed between Chinese and Russian state-owned enterprises and China announced a substantial infusion into the new Russian Direct Investment Fund.
While cordial, an unspoken undertone to the meetings was Russian concern about growing Chinese influence in the former Soviet Union and particularly Central Asia.