Will a remote Kazakhstan become closer?

By Vaidotas Šernius

The economy of Kazakhstan is the largest economy in Central Asia (CA). Soon the country will celebrate the 20th anniversary of its Independence (16 December 1991). What happened in the country during these years and what does Lithuania and Kazakhstan have in common?

Lithuania and Kazakhstan are in different regions and seek different goals. So are the political attitudes of the leaders of both countries. President of Kazakhstan Nursultan Nazarbayev has always been supporting the idea to retain USSR, but after the Belovezh agreement he had no other way out but to declare Kazakhstan’s Independence.

Although Kazakhstan pursues foreign policy of the majority of vectors – is in cooperation with the United States (sent its troops to Iraq, opened the air space and railways for transit to Afghanistan etc.), maintains close relations with China (Shanghai Cooperation Organization, export of energy resources etc.) - it is obvious that the country’s policy is directed toward Russia. Whereas the actual Kazakhstan’s partners are Russia and Belarus.

On 29 November 2009 the leaders of Russia, Kazakhstan and Belarus signed the agreement in Minsk on the establishment a Customs Union, and as of 1 July a new Customs Code came into force. Moreover, on 18 November in the Kremlin they signed the declaration on the Eurasian Economic Integration.

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Most likely the integration and economic cooperation between Kazakhstan, Russia and Belarus will increase. In view of this is quite difficult to speak about a more extensive political cooperation between Lithuania and Kazakhstan. Today both countries pursue different policies: Astana’s policy is directed toward Moscow and Minsk, whereas the policy of Vilnius - towards Brussels and Washington. Consequently, the most perspective field of bilateral cooperation between Lithuania and Kazakhstan is the development of economic relations.

In October 2011 Lithuanian President Dalia Grybauskaitė visited Kazakhstan where she met with President Nursultan Nazarbayev and took part in the opening session of the Lithuanian and Kazakh Business Forum. Economic relations and establishment of a Business Forum between the two states are the most important aspects connecting Lithuania with Kazakhstan.

Business Forum is an important step toward the development of mutual economic relations. Before the above visit Lithuanian President said: “Kazakhstan is an important Lithuania’s partner in Central Asia and a country of new economic opportunities for our business people. It is a rapidly developing nation which is strongly interested in implementing modern technologies and innovative business ideas”. Dalia Grybauskaitė also said that Lithuania and Kazakhstan are perspective business partners in the sphere of transport and logistics and major transport junctions connecting Europe and Asia.

The Business Council operating within the context of the above Forum will focus on business relations and specific projects. During the opening ceremony of the Business Forum Dalia Grybauskaitė said that ”it is the first time after 20 years that we have a common business council for implementing mutually beneficial business projects”.  During the visit the parties signed the agreements on the development of bilateral cooperation in the sphere of agriculture, culture, education and law enforcement.

But the main achievement of Lithuanian President was the agreement on the shuttle container train Saulė.President Nursultan Nazarbayev urged the Government to start implementation of this project immediately. The Ministry of Transport and Communications of Lithuania is also ready for cooperation.

It is expected that upon launching the shuttle container train the carriage of cargoes from Kazakhstan to Lithuania could be reduced to 10 days. Such an idea might be a starting point for Lithuania in the transit markets of Europe and Asia. In the long run the Saulė project could connect China with the EU and shorten duration of cargo transportation.

The first Saulė train with 41 containers carrying IT hardware moved from China via Kazakhstan, Russia and Belarus on 28 October and reached Lithuania on 10 November. The destination station was Belgium city Antwerp. The main advantage of the Saulė project is short delivery time (about four times faster) compared to container ship which takes about 40 days. The future will show whether this project will be beneficial to Lithuanian and Kazakh economy. Today the project looks attractive, but it is still “under trial”. Since there are no regular routes yet, cargo flows are insignificant. Besides, the Lithuanian and Kazakh project will have to compete with a similar project connecting Kazakhstan with Lithuania.

Will Lithuania benefit from Saulė project? It’ll become clear in the near future. Despite the current competition, the use of the advantages of the Viking railroad connecting Klaipeda and the port of Ilyichevsk (Ukraine) could generate major cargo flows from Eastern countries.

In order to retain pragmatic Lithuania’s relations with Kazakhstan, President Dalia Grybauskaitė mostly spoke about the economic policy with Nursultan Nazarbaeyv, and didn’t mention the aspects of regional and strategic policy. Thus, we could expect even stronger economic relations between the two countries.