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KAZAKSTAN


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 29,749 24,205 22,400 60
         
GNI per capita
 US $ 1,780 1,510 1,350 119
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 329 - (01/06/08)

Nazarbayev the regional maestro
Kazakhstan’s president, Nursultan Nazarbayev, bestrides Central Asia. Uzbekistan may be more populous, but it has a dictator in charge who is too ghastly for his own good, Islam Karimov, loathed at home and despised abroad. 

Nazarbayev is striving to turn his energy-rich colossus of a nation into a force for regional stability. He rather resembles President Chavez of Venezuala, which is exerting a major influence on neighbours and far-flung well-wishers by means of its oil wealth. It is to be the 'Bank of the South.' 

Nazarbayev lacks altogether Chavez's political radicalism. but then he lived most of his life under communism, enough to cure anyone of far leftism. But he craves that his country becomes the 'Bank of Central Asia.'

Up-country
Kazakhstan has the wherewhithal to do so. It is a coming country. It is the size of Western Europe, with only 16million people and yet 60% of the FSU's mineral resources! 

These include an abundance of fossil fuels. With global oil prices breaching the $130 per barrel level, there is only one way for it to go – up. 

It is doing just that, its GDP growth being in solid double figures throughout the present decade. Naturally this creates enormous opportunities – but also for individual corruption in which this country is also a leader, as well as public benefaction. 

Nazarbayev the be-all of Central Asia
President Nazarbayev has devised a new idea, the Central Asian Union (CAU). He is to head not just the most important and dynamic state in Central Asia, but Central Asia itself. He is proposing a union of all its states under the benign hegemony of Astana. Whether that proposal will ‘fly’ remains to be seen.

Karimov does not see quite eye-to-eye with Nazarbayev on this notion, or rather nostrum. He heads a more populous republic, 22m people, bang in the centre of Central Asia. He feels that he should be boss. 

The doubtful Astana-Tashkent axis
Nevertheless, he certainly has to do business with the Kazakh leader. On April 22 Karimov visited Astana to meet with his opposite number. Both leaders agreed to boost bilateral economic cooperation by creating a common trade area at the borders. Karimov's harsh criticism of Nazarbayev's proposed CAU, however, raised eyebrows among many in Kazakh political circles.

In particular, Karimov found the Central Asian Union to be an inadequate initiative that failed to consider differences in economic development among Central Asian states. He also reminded Nazarbayev that the Eurasian Economic Community (EurAsEC) already represents a regional institution of this sort. "I want to state right away that this initiative is unacceptable for Uzbekistan," Karimov said.

Nazarbayev officially announced his Central Asia Union initiative a year ago at a bilateral meeting with Kyrgyz President Kurmanbek Bakiyev. The initiative promotes political and economic integration in the region, but to date only Kazakh and Kyrgyz officials have conducted a series of meetings within its framework. 

The fact that Nazarbayev introduced the initiative and Kyrgyzstan was eager to support it is yet another sign of Kazakhstan's emergence as a regional leader. Kazakh and Russian mass media regarded Karimov's bitter words about the Central Asia Union as an expression of informal competition between the two presidents over leadership status in the region. Karimov is unlikely to stop Bakiyev-Nazarbayev cooperation, but he has made it clear that Uzbekistan will remain outside of the process.

The Kyrgyz card
A few days prior to Karimov's visit, Bakiyev also traveled to Astana. While Karimov's presence was sensational news, the Nazarbayev-Bakiyev meeting was rather quiet, following the usual tradition of exchanging promises to continue cooperation. Bakiyev once again validated his readiness to contribute to the strengthening of the proposed Central Asia Union and bilateral links.

In Kazakhstan's political circles Kyrgyzstan is considered as an increasingly important regional partner because of its water resources. As one Kazakh political analyst said, "water will soon be more expensive than oil and gas," therefore Kazakhstan is interested in securing stable cooperation in water resources with Kyrgyzstan.

Meanwhile in Kyrgyzstan, the government's recent decision to permit ownership of four resorts on Issyk-Kul Lake to Kazakhstan produced widespread public discontent. Leaders of the opposition party Social Democratic Party of Kyrgyzstan announced that over 250 people from Issyk-Kul region would march in protest to Bishkek. Arguments against Kazakh ownership of these resorts are often tainted with ethnic and nationalist rhetoric.

The Uzbek veto effective
De Gaulle famously vetoed British entry into the EU in 1963. He himself then predicted with his uncanny acumen: “After a disastrous Labour experiment, there will be a new Conservative government under Heath (the UK negotiator at the failed talks in Brussels). And that one will join the Common Market.”

Nazarbayev just has to wait out the demise of Karimov, a bitter obstructionist to the core of his being. He is said to be in bad health, although this is also said of Nazarbayev. It might just be that Uzbekistan, the region's largest consumer of water, will be an important factor in Kazakhstan's pursuit of effective water management in the coming years, but Nazarbayev's Central Asia Union will not be able to provide a framework for working out trilateral cooperation among Kazakhstan, Kyrgyzstan and Uzbekistan, so long as Karimov heads the latter.

Uzbekistan represents a lucrative market for Kazakh banks and investors, but they are rarely allowed to enter the Uzbek market. Despite the fact that trade volume between the two countries has doubled in the past two years to $1.4 billion and the number of Kazakh enterprises in Uzbekistan has risen from 73 to more than 400, Kazakh business circles complain about numerous obstacles in both countries' economic cooperation. "Unlike Russia, Kyrgyzstan, and Georgia, where Kazakhstan's economic presence has been expanding, the Uzbek government is closed to its neighbour," says a Kazakh entrepreneur who owns a business in Bishkek.

This is not the first time Karimov has rejected Nazarbayev's initiatives. Some Kazakh experts are sceptical about the possibility of increasing trade relations. In the past decade, both the Central Asia Cooperation Organization and EurAsEC proved to be more organizations on paper than actual frameworks for integration. Nevertheless, the trade volume between Kazakhstan and Uzbekistan will probably increase following Karimov's visit as it did after their last official meeting in Astana in September 2006. The increase will not be due to institutional frameworks, but rather to inter-personal relations between the two leaders.

Karimov also visited some of Astana's new landmarks especially, the state of the art medical institutions and the mammoth entertainment centre. At Astana's neurosurgical center, Nazarbayev commented, "I personally think that this will be one of the best centres in Kazakhstan and maybe in the world."

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