Janusz Bugajski is a Senior Fellow at the Jamestown Foundation in Washington. His recent book is "Failed State: A Guide to Russia's Rupture." His new book, to be published in the autumn, is titled "Pivotal Poland: Europe's Rising Power."
Kazakhstan hosted the Shanghai Cooperation Organization Summit (SCO) on July 4, a meeting that included China's Xi Jinping and Russia's Vladimir Putin. The summit provided an opportunity for Kazakhstan to highlight its independence and develop its relationships with major neighbors. It involved the signing of new agreements in both the political and economic spheres.
But Western countries must not fall behind, and should continue to enhance their ties with Kazakhstan and the broader Central Asian region.
Central Asia was once on the periphery of Western diplomatic priorities, but it is now starting to play a more critical role in Eurasia. Kazakhstan, the largest Central Asian state both in size and economically, in particular, is leveraging its potential as a supplier of energy and transit hub for Euro-Asian trade. As geopolitical upheaval across Eurasia continues unabated, including Russia's war of aggression against Ukraine, Western countries need stable and trusted partners in the region. They should now use the opportunity to deepen engagement with Kazakhstan.
Central to Kazakhstan's position is its emergence as a middle power. Capitalizing on its strategic location, growing economy, and abundant natural resources, Kazakhstan has increasingly become a significant player on the Eurasian stage. Its role as a connector between East and West allows it to influence regional cooperation and economic integration. By developing diplomatic ties with both Western and Eastern powers, Kazakhstan has positioned itself as a key mediator and economic partner in Eurasia.
A prime example of Kazakhstan's potential is the provision of rare earth metals -- a high-demand resource increasingly indispensable in high-tech industry. The country is rich in various solid minerals, including iron, copper, uranium, zinc, and aluminum, and produces 18 of the 34 types of raw materials identified as "critical materials" by the European Union. As the West seeks to diversify its supply chains away from monopolistic dependencies, Kazakhstan can become a reliable alternative, capable of supplying materials essential for everything from electric vehicles and aviation to renewable energy technologies.
In 2022, the EU and Kazakhstan signed a memorandum to develop a secure and sustainable supply of raw materials, batteries, and renewable hydrogen. Now, it is necessary to establish joint ventures between EU companies and Kazakh companies. This includes development of mining, processing, and refining projects.
The EU can provide advanced mining technologies and expertise in exchange for raw materials. It is important for both parties, of course, to ensure that mining practices adhere to strict environmental and social standards. This includes decarbonizing the critical raw materials value chain and using renewable energy sources.
Furthermore, Kazakhstan's geographic position makes it an important transit hub for trade between Asia and Europe. The country accounts for about 80% of all land transit from China to Europe, offering faster, more efficient alternatives to traditional maritime routes.
The EU and other international partners have committed significant investments to enhance the Trans-Caspian International Transport Route (TITR), which links China to Europe via Kazakhstan, the Caspian Sea, and the South Caucasus. It has become a viable alternative for transit cargo transportation from China. Encouraging investments from private companies, especially in managing key infrastructure such as ports and airports, can significantly enhance Kazakhstan's transit capabilities.
Importantly, the EU and the U.S. should collaborate with Kazakhstan to navigate the challenges posed by sanctions on Russia. Kazakh President Kassym-Jomart Tokayev has publicly reaffirmed Kazakhstan's commitment to comply with international sanctions against Russia and has assured Western leaders that his country is not aiding Russia in evading them. Kazakhstan has implemented several measures to prevent the use of its territory to circumvent sanctions, including launching an online system last year to track goods crossing its borders in real-time.
Recently, EU Sanctions Envoy David O'Sullivan commended the steady decline in the import and re-export of dual-use sanctioned items to Russia via Kazakhstan, praising its proactive measures and cooperation with the EU.
Western countries should acknowledge Kazakhstan's geopolitical challenges due to its proximity and economic ties with Russia. They can support Kazakhstan's efforts by providing technical assistance and training to improve customs monitoring systems, establishing intelligence-sharing mechanisms to identify potential sanctions evasion tactics, and offering economic incentives and support for Kazakhstan's compliance with sanctions, such as investing in infrastructure projects that enhance Kazakhstan's independent trade routes.
Yet, Western countries, traditionally cautious in engaging with regimes considered undemocratic, has been less willing to collaborate with Kazakhstan beyond oil-related business deals. However, since the election of Kassym-Jomart Tokayev in 2019, the country has been implementing political reforms to decentralize power, limit presidential authority and increase the influence of an elected parliament.
While the promise of reforms often does not meet expectations, the changes in Kazakhstan appear to be consequential. In 2021, U.S. Secretary of State Antony Blinken expressed strong support for the country's reform agenda, noting the positive international response to these changes. And in May, at the third session of the annual High-Level Dialogue on Human Rights and Democratic Reforms between Kazakhstan and the U.S., the American side reaffirmed its strong support for the full implementation of Tokayev's reform agenda.
Kazakhstan's reforms have positively impacted its ability to attract foreign direct investment, particularly from Western countries. The country is Central Asia's top investment destination, securing over 61% of the region's total FDI. In 2022 to 2023, the country attracted a record high amount of FDI, at approximately $41.3 billion. The EU is the largest trade and investment partner for Kazakhstan, making up about 30% of the country's foreign trade.
But more can be accomplished. Closer relations between Western countries and Kazakhstan would ensure that the country remains committed to domestic reform. By partnering with Kazakhstan, the West will gain access to critical natural resources that enable the diversification necessary for energy security and technological development.
A stable Kazakhstan will also facilitate Europe's trade with Asia, including through the TITR. To build these closer relations, Western countries can invest in joint ventures in key sectors such as mining, renewable energy, and infrastructure. For example, collaborating on environmental sustainability initiatives, such as projects aimed at decarbonizing the economy, would also be beneficial. Additionally, they can provide technical assistance and share best practices in governance and regulatory frameworks.
As a middle power, Kazakhstan has shrewdly balanced its relations with major powers such as Russia and China, acting as a stabilizing force in the region. The West must carefully navigate the layered geopolitical realities in Central Asia, where Russia and China exert significant influence and project their military capabilities.
A measured approach that respects Astana's existing relationships and does not push Kazakhstan toward Russia or China through invasive mentoring would open new avenues of cooperation with Europe and America.
Ultimately, Kazakhstan's role as a middle power, combined with its political reforms, make it a constructive and evolving player in Eurasian affairs. As Kazakhstan continues its reform trajectory, the West should support domestic change and develop this strategic partnership, which will benefit both sides.