The EU and Kazakhstan Aim for Enhanced Partnership

By Roman Muzalevsky

In late October Kazakhstan’s President, Nursultan Nazarbayev, visited Brussels where he met with Belgian Prime Minister Yves Leterme, the European Council president, Herman Von Rompuy, and NATO Secretary-General Anders Fogh Rasmussen. The parties discussed energy and economic relations, Kazakhstan’s chairmanship of the Organization for Security and Cooperation in Europe (OSCE) and regional security challenges in the post-Soviet space. Astana and Brussels also signed a series of documents to boost economic relations.

Currently, trade relations between Belgium and Kazakhstan, while growing, are not fully utilized, with the trade-turnover reaching $129.23 million in the period between January and July of this year. There are also 29 Belgian enterprises operating in Kazakhstan, although only 20 of them appear to be active (www.kazpravda.kz, October 27). However, EU-Kazakh trade turnover throughout the past eight months reached $25 billion (www.mfa.kz, October 26). Today, Kazakhstan relies on the EU for 40 percent of all foreign investment, with two-thirds of it being in the country’s energy sector (www.voanews.com, October 26). European investments constitute one third of all investments in Kazakhstan since the country’s independence, with EU countries investing as much as 7.5 billion Euros in Kazakhstan in 2009 alone (www.khabar.kz, October 26).

Kazakhstan now meets 20 percent of the EU’s energy needs. During his visit, Nazarbayev pledged to boost energy exports to the EU even further. Kazakhstan is expected to produce 150 million tons of oil by 2015, doubling the current annual oil production of 76 million tons (EDM, October 1; www.rus.azattyq.org, October 26). The Kazakh leader has also called on the EU to push more actively for the implementation of the Nabucco project –the proposed gas pipeline stretching from the Caspian to Europe across the Caucasus and bypassing Russia.
Nabucco is viewed as a rival to Russia’s South Stream pipeline project, and is expected to transport 31 billion cubic meters (bcm) of gas to the EU by 2020, largely drawing on the energy resources in the Caspian region. Kazakhstan’s Caspian shelf, for instance, is estimated to contain 3.3 trillion cubic meters of gas reserves, and the country’s gas production is likely to reach 45 bcm in 2010  (www.en.rian.ru, July 18). This makes Kazakhstan and the entire region increasingly vital for the EU’s energy security. Energy conflicts between Russia and Ukraine, and later between Russia and Belarus, have only underscored the need for the EU and its partners in Central Asia to diversify their sources of energy production and energy export routes.

Apart from boosting energy relations, Astana wants expanded foreign investment and transfers of technological knowhow from the EU to advance the innovative development of the country (www.kazpravda.kz October 27). As Nazarbayev observed, “the focus on raw materials is a closed chapter for Kazakhstan,” but the country “certainly needs Western knowledge and technologies” (www.rus.azattyq.org, October 26). Leterme thus fully supported the Kazakh initiative to create a bilateral investment council and adopt a new framework agreement on Kazakhstan-EU cooperation (www.khabar.kz, October 26). Agreements, worth approximately 600 million Euros, were also signed between the EU and Kazakh companies during Nazarbayev’s visit (www.voanews.com/russian, October 26).

The present Belgian presidency of the EU and Kazakhstan’s chairmanship of the OSCE provide an extraordinary opportunity for both parties to not only strengthen their bilateral agenda but also promote an enhanced EU-Kazakhstan partnership capable of bolstering economic relations, energy security and regional stability (www.kazpravda.kz, October 27; www.inform.kz, October 21).

The EU and Kazakhstan want to strengthen the security role of the OSCE given the security challenges in Afghanistan, Kyrgyzstan, Tajikistan and the fragile situation in the South Caucasus. This is pertinent in light of the EU’s 2009 Lisbon Treaty that entails structural changes within the EU and the need to revitalize the OSCE’s role as a security bridge between West and East (www.inform.kz, October 21). Astana insists that the OSCE, as the largest regional security organization, needs a new impetus to pursue a more effective security mission (www.mfa.kz, November 12).

Von Rompuy emphasized that, as the chairman of the OSCE, Kazakhstan “occupies an important position in the global arena,” and that the OSCE heads-of-state summit in Astana on December 1-2 will “help determine the future path of the organization’s development, as well as strengthen and enhance its work to provide for regional security” (www.khabar.kz, October 26). Rasmussen thanked Kazakhstan for its support to NATO’s mission in Afghanistan, stressing that the Alliance now pays greater attention to Kazakhstan’s interests, given Astana’s position as “NATO’s leading partner in the region” (www.khabar.kz, October 26).

Astana’s enhanced regional profile and its chairmanship of the OSCE clearly provide a vibrant platform for elevating the EU-Kazakhstan partnership to a new level, both in the framework of the OSCE and as part of the bilateral agenda. The two parties can do a lot to enhance security and promote socio-economic development throughout Central Eurasia – an area fraught with unresolved economic, political and security challenges. In this context, the outcome of the OSCE heads-of-state summit in Astana will demonstrate the potential of the sought-after enhanced EU-Kazakhstan partnership.

The Jamestown Foundation