Relations between Russia and Kazakhstan: corners and ellipses

Which was actually expected, despite several publications in Russian press saying that a lot of problems had been accumulated between Kazakhstan and Russia, including acute ones that had had to be discussed during the visit and become its "face".

The authors of those articles seemed to be unaware that never, either under Yeltsin, or after him, Moscow and Astana discussed their contradictions in public. It is not the style of Kazakhstani or Russian diplomacy, when the CIS countries are concerned (apart from exceptional cases, which, however, never had anything to do with Central Asian region). Although there was some intrigue involved in the negotiations; some observers drew attention to the visit of an unofficial, but important guest from USA - a US president's brother Neil Bush - that had preceded the visit of Vladimir Putin. The former arrived to Kazakhstan to discuss issues of developing education, but it is difficult to imagine that no unofficial, but important consultations with the Kazakhstani government took place.

Nevertheless, that part of the visit of Russian president, which was accessible for public was a clear demonstration of close co-operation and ally relations. It also took place against a good background: the economic and political co-operation is growing between Kazakhstan and Russia. Both countries, as it is well-known, apart from CIS, make part of various international organisations: the Shanghai Co-operation Organisations, the Collective Security Treaty, the Eurasian Economic Union, and the "semi-embryonic" Common Economic Space. The number of joint Kazakh-Russian enterprises is really big, in the end of last year there were a little more than two thousand. Problems around Baikonur are resolved gradually, moreover, since cases of rocket fragments falling to Kazakhstani territory reduced, this subject has lost its relevance. In the military area of co-operation it is enough to mention only one important fact: there are much more Kazakhstani citizens studying in Russian military educational institutions, than in any other country. Moreover, they study on the same conditions as Russians. In oil area the relations again despite not only Western, but also some Russian estimations in mass media, our relations are excellent: the oil, produced in Kazakhstan, is stably delivered to the West through Russian pipelines, "LUKoil" and "KazMunaiGas" will work on the shelf of Caspian Sea jointly. The volume of Russian investments into Kazakhstan is growing quickly - last year it approached $2 billion (of which $ 1.5 billion have been invested by "Lukoil"). This figure is on the level of the US investments into the economy of Kazakhstan during the years of investment boom in the republic.

The growth of volumes of mutual trade can also be mentioned - in 2003 it exceeded $5 billion. The Russian share in the whole foreign trade turnover of Kazakhstan is quite big - 25% and it is even bigger in the volume of import - around 40% (!). Hardly anywhere in the world there are such proportions in the trade between big countries. Kazakhstan has resolved its border delimitation issues with Russia with more ease, than with any other country, although it is well-known that the Russian-Kazakh border is the biggest one in the world. Clearly, the leaders of the two countries could express compliments to each other and to the level of relations at the opening of the Year of Russia in Kazakhstan without any exaggerations.

At the same time it would be wrong to ignore problems behind this by all means very beautiful and joyous facade. Although the volume of mutual trade is quite high, it is, for instance, twice lower, than between Russia and Belarus. Although the latter is twice smaller than Kazakhstan in population and several times smaller in its territory. And even in the existing trade between Russia and Kazakhstan more than a half belongs to the trade relations between border regions. It means that the trade relations between Russia and Kazakhstan are distributed very unevenly.

With reference to joint ventures, (that is, work stably) only approximately 1,100 of 2 thousand regularly report to statistic authorities. Russian-Kazakh JVs in mechanical engineering although they have been established, and some of them are developing, are still far in the volumes of their production from those to which they aspired earlier. The economic integration within the EEU is quite difficult: for instance, in Kazakhstan many are scared of the forthcoming introduction of new heightened customs duties for imported automobiles, which many relate with the position of Russia on this issue in this structure. In the area of military co-operation all is quite well, but according to a number of publications in the Russian press, a wish of Kazakhstan to co-operate closer with the West in this worries Moscow quite a lot.

It is another reason for estimating negotiations between the leaders of the two countries in Astana as positive. As well as agreements reached. Among them a decision to prolong the terms of rent for Baikonur space centre is the most concrete.

It is well-known that the rent is going to be prolonged until 2050. Earlier on an unofficial level rumours circulated that Astana wished to date it by 2040, and Moscow by 2060, but in fact the middle of the century is an optimal term for all. It should be remembered that Russia gradually developed capacities of space centres on its own territory, statements about a necessity to create an alternative to Baikonur are expressed periodically (last time several months ago). In these conditions insisting on a shorter term of Baikonur rent is not in the interests of Kazakhstan, which can push the decision of Russians to begin using their own space facilities sooner. And if Russia leaves Baikonur, Kazakhstan will have a lot of problems. It is the socioeconomic situation in the region, in which it is located and a loss of all hopes for the development of our own high science in this area.

And the question - what to do with the facility - there is no other usage for Baikonur apart from its being the basis for Russian cosmonautics, because technologically this facility doe not comply with the national models of spacecrafts (if it was otherwise, perhaps the space centre would not be Russian anymore, it could be transferred to somebody else for usage in the 1990-s).

Therefore, the decision reached on Baikonur is optimal, moreover, Vladimir Putin, made a diplomatic compliment to the intellectual potential of Kazakhstani specialists, due to which the republic could participate in the joint scientific work on space research. Nothing is known about any big success on that way so far, but diplomacy is diplomacy.

The second in political significance among Kazakh-Russian agreements reached in Astana has to do with joint development of two blocks in Kazakhstani sector of Caspian Sea by "Lukoil" and "KazMunaiGas" companies. It is obviously profitable for both countries. Personally for Vladimir Putin it is also important because with the "Yukos" scandal on the background it allows him to demonstrate the care of authority for big oil business; like, nobody is going to suppress oligarchs only for their being oligarchs, be loyal, and the authority will support you in big international projects. For "Lukoil" the agreement is important not merely because of a possibility to work on Kazakhstani shelf; it is unknown when the oil production will start, if it starts at all, moreover the company already works actively in the Russian part of the shelf. It gives "Lukoil" a possibility to extend its participation in promoted PR projects, on of which currently includes all that is related with the Kazakhstani part of Caspian shelf.

It is well reflected on the investment rating, the image, the company shares rate. Which means the same principle that is used by so many companies, desiring to work in Kazakhstan.

For Kazakhstan there are not less reasons in the inked agreement and they are even more important. Firstly, the national company "KazMunaiGas" unlike Russian oil producing companies does not have and experience or technologies for the offshore oil production. It would be much more expensive to buy them in the West, than to conclude an agreement with the Russians. Secondly, in our view, politics was also involved here. Kazakhstan in the last years, when high oil prices on the world market allowed the economy to breathe with more ease, than in the beginning of independence, now obviously feels the burden of dependence on Western companies, in which the oil & gas industry of the country found itself in due course.

A complicated game around that superimportant issue goes on for a long time and here it's all right to demonstrate co-operation with the Russian big business - like, Western companies are not the centre of the world.

Taking a glance at all mentioned above a following conclusion can be drawn: if we look for some visible image of Kazakh-Russian co-operation, we get a complicated geometric figure with multiple corners, although not too sharp, but also with some smooth ellipses