Kazakhstan applied to join the World Trade Organization (WTO) in January of 1996. Twenty long years later (July 27, 2015), President Nazarbayev signed the official ascension documents in Geneva, making it the 162nd WTO member state.
While assessing the impact of Kazakhstan’s entrance into the WTO is difficult at this early stage, speculation is rampant given current geopolitical tension in Central Asia and the global price of oil. This article will attempt to contextualize this decision by adding insight to three questions – why, why now, and what’s next?
The WTO is an important stepping stone for legitimacy and integration on the world stage. To some, most notably Kazakh economist Aidarkhan Khusainov, WTO membership is more comparable to United Nations membership, simply providing an image boost, rather than a substantive change in Kazakh political economy. This diminished outlook is not the only position in Kazakhstan and around the world, however, as many believe that this move will open up Kazakh markets, allow for increased foreign investment, and diversify the largely energy-dependent and landlocked nation.
Regardless of economic prognostications, Nazarbayev’s signature ultimately formalized an already informal economic reality. As Nazarbayev himself said, “In the mid-1990s, Kazakhstan had ties only with post-Soviet states, while now we are trading with 185 countries of the world.” Kazakhstan’s elevated status into the WTO, therefore, is a bit more pomp and circumstance, and less substantive change, as much of the Kazakh economy has already been developed in the global arena for some time. Thus, WTO membership is more about affirmation of deeds already accomplished, than hope for potential development somewhere far off in the future.
Kazakhstan’s membership status in some ways could always be seen as a foregone conclusion. For example, more than 50% of the nation’s trade is with the European Union. WTO membership, therefore, is a continuation of a two-decade long process of real economic integration and reform, rather than a radical departure from it. The significance of ‘now’ is less about Kazakhstan’s economic reality and more about the potential geopolitical and economic challenges in the region.
First, the global drop in the price of oil has had a significant impact on the Kazakh economy. WTO membership will not only provide new opportunities for investment and economic diversification, but greater flexibility in global markets.
Second, U.S.-led sanctions on Russia have indirectly constrained Kazakhstan’s economy. Russia and Kazakhstan are more than trade partners, but members of the Eurasian Economic Union (EEU), which features Kazakhstan, Russia, and Belarus. Russia’s economic woes have negatively affected the strength of this union. Evidence of this from a political perspective is the renewed stress on WTO negotiations from both Kazakhstan and Belarus starting in 2013. Moreover, Russia has gradually shown a willingness to support these negotiations (Russia joined the WTO in 2012) rather than oppose them.
Third, the why now of this moment is representative of a broader desire for engagement in Central Asia, particularly between those global players with higher stakes in the region. We are far from a proliferation of cooperation, but recent events have shown an environment in cautious conversation and optimistic consideration. WTO membership does not magically transform enemies into friends, but it does pave the way for a more solid process of enhanced cooperation between Kazakhstan and many other nations.
What remains to be seen is whether this shift is more representative of the dynamism of the landscape or the individual states? In this case, will we see motivated regional cooperation or cooperation in lieu of state capacity for direct or unilateral action?
Economic projections range from the optimistic (new investment and development) to the pessimistic (job loss, wage decrease, and simply being out competed) to the apathetic (WTO is more about banal prestige and less about workable policy). Any basic economic theory will show that increased free trade comes with benefits and drawbacks, where the effect on the state is ultimately determined by good governance. What is most clearly next is Kazakhstan’s opportunity to diversify economically and have that diversification feed into a new positive political evolution. If the country is able to broaden its economic capacity, then its membership in the WTO, at least in the short term, is a win, offering Kazakhstan an outlet from energy export dependence. If it is able to broaden that into real political (read: democratic) consolidation, then membership in the WTO will have proven far more invaluable than anyone could have surmised. These potential geopolitical ramifications and speculative regional suggestions are what should be seen as the truly fascinating, and still unknown mystery, of pending WTO ascension.
What Kazakhstan’s WTO entrance hopefully suggests is less contestation and more cooperation across Central Asian economies. The EEU can be seen as strong evidence of this. Until very recently, the EEU was a barrier for Kazakhstan’s entrance in the WTO. With Russia and Kazakhstan now WTO members, and Belarus poised to follow, the EEU (which is Russian-led), has shown a clear willingness to conform to global economic standards. The EEU is thus now operating within the parameters of the WTO. What remains to be seen is if there is a bigger or more politically-motivated strategy behind Russia’s cooperation. Put another way – how does this affect the regional economic strategy of Russia’s so-called privileged area of influence? Is Kazakhstan moving away from the regional fold and into independence (or interdependence) in the global market? I find it difficult to believe that Russia would passively allow the countries of what it considers to be its personal sphere of influence to integrate one by one into the global economy (a US and EU-led order) without also trying to achieve serious advantages or privileges for itself. This is not necessarily a bad thing. Indeed, it is quite a normal thing when considering international political economy. But there are both acceptable ways of achieving those advantages or privileges and non-constructive ways. In this case, a win for WTO liberal institutionalism is a sign that both sanctions and the regional economic landscape have limited Russia’s influence and ability to project power arbitrarily. Russia can either adapt to that reality and incorporate itself better into that changing landscape or problematically try to fight such change. Time will tell exactly how that plays out.
To turn to Kazakhstan’s strategic outlook, however, WTO membership represents not only a win for Nazarbayev’s ambitions, but for Kazakhstan’s potential as a serious player on the international stage. Being the strongest economy of the former Soviet states but also quite literally surrounded by great and regional powers, Kazakhstan has been unable so far to cast a long geopolitical shadow in any direction. I expect Kazakhstan to gradually fill this opportunity of potential by trying to expand its own capacity and in so doing drafting more of an independent, rather than subservient, strategy to its large imposing neighbor to the North. Hopefully, Kazakhstan will carve out that new role without incurring a heavy price militarily or in terms of new economic regional conflict. So congratulations, Kazakhstan, on the end of your 20-year odyssey. Here is to hoping a WTO with Kazakhstan turns into a win-win-win for all sides: Kazakhstan, Central Asia, and the global community.
Kazakh court case tests Chinese power
A Kazakh court is set to put to the test China’s ability to impose its will and strongarm Muslim nations into remaining silent about its brutal crackdown on Turkic Muslims in the north-western province of Xinjiang.
The court will hear an appeal by a former worker in one of Xinjiang’s multiple re-education camps against the rejection of her request for asylum. The appeal illustrates the political quagmire faced by Central Asian nations and Turkey given their ethnic, cultural and linguistic ties to China’s estimated 11 million Turkic Muslims that include 1.5 million people of Kazakh descent.
It also highlights China’s risky bet on being able to leverage its economic power to ensure the Muslim world’s silence about what amounts to the most concerted effort in recent history to reshape Muslim religious practice.
Up to one million Turkic Muslims have, according to the United Nations, been detained in a network of re-education camps in which they are being forced to accept the superiority of Chinese Communist Party beliefs and the leadership of President Xi Jinping above the precepts of Islam.
Beyond the camps, Turkic Muslims in Xinjiang, a strategic minerals-rich province bordering on eight Central and South Asian nations that China has turned into a 21st century Orwellian surveillance state, are forced to refrain from religious practice and custom in public.
After denying the existing of the camps for the longest period of time, China last month felt obliged to acknowledge them and give them legal cover.
Authorities in Xinjiang amended their anti-extremism regulations “to allow local governments to set up institutions to provide people affected by extremist thoughts with vocational skills training and psychological counselling.” China asserts that the crackdown is intended to counter extremism, separatism and terrorism.
China’s acknowledgement was designed to counter the UN report, threats of US sanctions against officials and companies involved in the Xinjiang crackdown, and revelations by 41-year-old Sayragul Sauytbay, a Chinese national of Kazakh descent.
Ms. Sauytbay testified in an open Kazakh court that she had been employed in a Chinese re-education camp for Kazakhs only that had 2,500 inmates. She said she was aware of two more such camps reserved for Kazakhs.
Ms. Sauytbay was standing trial for entering Kazakhstan illegally after having been detained at China’s request.
She told the court that she had escaped to Kazakhstan after being advised by Chinese authorities that she would never be allowed to join her family because of her knowledge of the camps. Ms. Sauytbay was given a six-month suspended sentence and released from prison to join her recently naturalized husband and children.
Since then, Ms. Sauytbay’s application for asylum has been rejected and she has until the end of October to leave Kazakhstan. She hopes that an appeal court will reverse the rejection.
Ms. Sauytbay’s case puts the Kazakh government between a rock and a hard place and is but one of a string of recent cracks in the Muslim wall of silence.
Kazakh authorities have to balance a desire to kowtow to Chinese demands with a growing anti-Chinese sentiment that demands that the government stand up for its nationals as well as Chinese nationals of Kazakh descent.
Ms. Sauytbay’s revelations that ethnic Kazakhs were also targeted in the Chinese crackdown sparked angry denunciations in Kazakhstan’s parliament.
“There should be talks taking place with the Chinese delegates. Every delegation that goes there should be bringing this topic up… The key issue is that of the human rights of ethnic Kazakhs in any country of the world being respected,” said Kunaysh Sultanov, a member of parliament and former deputy prime minister and ambassador to China.
In a further crack, Malaysia this week released 11 Uyghurs who were detained after having escaped detention in Thailand.
The Uyghurs were allowed to leave the country for Turkey. The move, coming in the wake of a decision by Germany and Sweden to suspend deportations of Uyghurs to China, puts on the spot countries like Turkey and the United Arab Emirates, where Uyghurs risk extradition.
Malaysia’s release of the Uyghurs occurred days before Anwar Ibrahim took the first hurdle in becoming the country’s next prime minister by this weekend winning a parliamentary by election.
Mr. Ibrahim last month became the Muslim world’s most prominent politician to speak out about the crackdown in Xinjiang.
Earlier, Rais Hussin, a supreme council member of Malaysian prime minister Mahathir Mohamad’s Parti Pribumi Bersatu Malaysia (Bersatu) party and head of its Policy and Strategy Bureau, cautioned that “that geographical proximity cannot be taken advantage by China to ride roughshod over everything that Malaysia holds dear, such as Islam, democracy, freedom of worship and deep respect for every country’s sovereignty… On its mistreatment of Muslims in Xinjiang almost en masse, Malaysia must speak up, and defend the most basic human rights of all.”
Pakistan’s Religious Affairs and Interfaith Harmony minister, Noorul Haq Qadri, was forced to raise the issue of Turkic Muslims with Chinese ambassador Yao Xing under pressure from Pakistanis whose spouses and relatives had been detained in the Xinjiang crackdown.
Ms. Sauytbay’s appeal for asylum is likely to refocus public opinion in Kazakhstan and other Central Asian nations on the plight of their Turkic brethren.
“She will not be deported, we will not allow it,” said Ms. Sauytbay’s lawyer, Abzal Kuspanov.
Mr. Kuspanov’s defense of Ms. Sauytbay is about far more than the fate of a former Chinese re-education camp employee. It will serve as a barometer of China’s ability to impose its will. If China succeeds, it will raise the question at what price. The answer to that is likely to only become apparent over time.
Why the upcoming Congress of the Leaders of World is so vital for peace and prosperity
Religion has been, and remains, an immense spiritual force for good in our world. The shared values which underpin all world’s major faiths have positively moulded how we treat each other. Religious beliefs give direction, comfort and hope to billions of people.
Religious communities appear to have enormous potential for addressing today’s social problems. Faith groups across the globe are prominent in feeding the hungry, sheltering the homeless and caring for the vulnerable. Our world would be poorer without the impact of religion on our lives.
Throughout history, religion has also been exploited to sow divisions. Instead of bringing people together and encouraging them to behaving decently toward each other, it has been abused to fuel suspicions and hatred, spread confusion about the true essence of religion. We are facing the problem of ignoring what religions have in common and exaggerating and distorting the difference between, and at times within, faiths.
The abuse of religion continues and is undermining hopes for peace and progress. In recent years, many thousands have died and millions more had to flee their homes in conflicts, in which religion has been used to justify discrimination and violence. Countering these dangerous distortions is one of the challenges that religious leaders should address.
There is no single answer. Yet at the heart of the solution is dialogue between religions to foster understanding and respect. This is an overarching aim of the Congress of the Leaders of World and Traditional Religions which is to be held for the sixth time in Kazakhstan’s capital Astana this month (October.)
The Congress was initiated by Kazakh President Nursultan Nazarbayev amid the growing religious tensions and extremism following the 9/11 terrorist attack in the United States. He believed it was critical that the opportunity be provided for religious leaders to work together to prevent religion being used to divide us.
His vision has struck a chord across the world. The Congress, which takes place every three years since 2003 has engaged prominent religious leaders and politicians from different countries around most pressing issues. By 2015, the number of delegations attending had increased from 23 to 80. High-profile attendees included then UN Secretary-General Ban Ki-moon, King Abdullah of Jordan and President of Finland Sauli Niinistö. Discussions centred on the role of religion in promoting development and measures to reduce appeal of violent extremism among young people.
The Sixth Congress, which takes place on October 10-11, will build on this efforts. Its focus is on how religious leaders can work together to play their full part in creating a secure world and prevent faith being abused to set people against each other.
Located at a crossroads of different civilizations, Kazakhstan has placed greater importance on promoting religious harmony and mutual respect. Our country’s history and geography have combined to create a society in which people of many different backgrounds and faiths live within single boundaries. Religious freedom has become a precious asset of our nation, which allows diverse beliefs to peacefully coexist and helps us to negotiate any concerns in a constructive spirit.
Such a mixture could have been, as it has been the case in other countries, a worrying source of tension and conflict. Despite negative expectations such diversity has been turned into a strength in our society where citizens are equally respected and are able to make their full contribution to the common welfare.
As a matter of fact, while Kazakhstan’s population may be largely Muslim, followers of all traditional faiths live in harmony with each other, are free to worship and enjoy equal rights guaranteed by the constitution. It is a source not only of national pride but has also been an indispensable platform for our stability and prosperity at home and growing influence abroad.
In this turbulent world, dialogue and mutual respect has never been more important. Nor has it been more critical to provide the forum where religious and political leaders can work together to prevent any distortion of faith for violent ends. The upcoming Congress is so vital for peace and prosperity.
Reforms Can Accelerate Economic Diversification in Kazakhstan
Kazakhstan’s future growth depends on reforms that provide a level playing field for the private sector and support economic diversification, according to a new Asian Development Bank (ADB) Country Diagnostic Study launched today.
The study, Kazakhstan: Accelerating Economic Diversification, identifies the most binding constraints to growth and provides in-depth analysis of structural reforms that will bring the country to its growth potential. The report finds that consistent and successful reform efforts can add an average of 1.2 percentage points per year to Kazakhstan’s gross domestic product.
“Kazakhstan needs to accelerate structural reforms to support the country’s economic diversification,” said ADB Country Director for Kazakhstan Mr. Giovanni Capannelli. “These reforms include improving the country’s business climate, enhancing competitiveness, and increasing private sector participation in the economy.”
Kazakhstan’s economy has transformed since its independence in 1991, mainly due to a surge in oil and gas exports. While the country achieved middle-income status in 2006, the downturn of oil and other commodity prices in 2014 exposed the country’s vulnerability to external shocks and constrained government revenues.
Future growth will depend on identifying sectors in which Kazakhstan has a strong growth potential, according to the study. These include food processing, basic metals, and chemicals. In agriculture, redirecting subsidies toward investment in infrastructure, improving access to finance, and promoting innovation can substantially boost productivity. Greater investment in infrastructure is essential to provide a link to unexploited markets, decrease transport costs, and support the production of tradable goods. Transit trade has a large growth potential, while increasing the efficiency of transport infrastructure can generate additional growth from other tradable sectors such as manufacturing, the report said.
ADB began supporting Kazakhstan in 1994 and has since approved over $5 billion in sovereign loans, nonsovereign loans, and guarantees. ADB operations in Kazakhstan are helping open up transport routes, foster private enterprise, address inequalities, promote inclusive growth, and deliver knowledge products and services. ADB also contributes to Kazakhstan’s participation in the Central Asia Regional Economic Cooperation (CAREC) program.
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