Central Asia grapples with the impact of the Russian war
During the Antalya Diplomatic Forum in Turkey, which took place from March 11 to 13, the Minister of Foreign Affairs of the Kyrgyz Republic, Ruslan Kazakbaev, told Helga Maria Schmid, Secretary General of the Organization for Security and Cooperation in Europe (OSCE), that his country would be happy to host the Russian-Ukrainian talks and to serve as a “mediator for the restoration of peace and mutual understanding” between the two countries.
On the sidelines of the forum, Kazakbaev also met with Azerbaijan’s Foreign Minister Jeyhun Bayramov and Slovenia’s Foreign Ministry State Secretary Stanislav Raščan and told them that the Kyrgyz Republic wants the conflict. Russian-Ukrainian. end, reaffirming his country’s readiness to play a role in achieving that outcome.
Why is the Kyrgyz Republic so keen on getting involved in the Russian war in Ukraine? Because this landlocked Central Asian country of more than 6.5 million people depends on its economic ties with Russia through the Eurasian Economic Union, “an international organization for regional economic integration“, which includes Armenia, Belarus, Kazakhstan and the Kyrgyz Republic.
Any Western sanctions against Russia will have a direct impact on the Kyrgyz Republic, where 20% of the population lives below the national poverty line, according to 2019 figures.
The conflict between Russia and Ukraine has already begun to have a negative economic impact on the five Central Asian republics of Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan, which were once part of Soviet Union.
Oil, remittances and food
Sanctions on Russia have sent shockwaves from Nur-Sultan, the capital of Kazakhstan, to Ashgabat, the capital of Turkmenistan, as each of the Central Asian countries grapples with the fallout of these sanctions and the impact that they will have on their savings.
Kazakhstan, which “exports two-thirds of its oil supplies through Russian ports”, quickly raised its base interest rate from 10.25% to 13.5% and intervened in the foreign exchange markets to protect the tenge, its currency, which “sinked alongside the Russian… [ruble] after Moscow launched attacks on Ukraine,” according to Reuters.
Kazakh officials later held talks with the US Embassy in Nur-Sultan to downplay the impact Western sanctions on Russia could have on Kazakhstan’s economy.
Meanwhile, no major Russian city can function without seasonal migrants, especially in the construction sector; About 5.2 million migrant workers entered Russia between January and September 2021 from the Kyrgyz Republic, Tajikistan and Uzbekistan, according to data provided by the Russian Interior Ministry.
Many of these migrants send the money they earn in the form of remittances back to their country of origin. This represents a significant percentage of the gross domestic product of Central Asian states such as the Kyrgyz Republic, where such remittances accounted for 31% of GDP in 2020, and Tajikistan, where such remittances accounted for 27% of the country’s GDP in during the same period. year.
As the ruble continues to fall against the US dollar, Russia imposes capital controls on currency transfers and economic tightening takes hold in Russia, migration and remittances will slowly dry up in Central Asia . Kazakhstan’s tenge and Uzbekistan’s som are already struggling to retain their value. The continuation of Western sanctions against Russia will have a serious long-term impact on the Central Asian republics.
In addition to the oil and remittance crises facing Central Asian countries, Russia also recently announced that it would no longer be able to supply Kazakhstan and the Kyrgyz Republic with grain and sugar. These republics depend on imports of grain and sugar in normal times, but with the drought in the central belt in 2021, these imports have become fundamental for the survival of the populations of these republics.
For now, governments in the region say they have enough grain and sugar stocks, but Russia’s “temporary ban” on these items will become a problem if the situation continues into the summer.
It is important to emphasize here that Russian speakers represent significant sections of the population of each of the republics of the former USSR and also form a large part of the population of many Eastern European countries.
As nationalist attitudes flourish in Russia – something Vladimir Lenin warned against in 1914 – concerns are growing of similar destabilization among countries that share a border with Russia, especially where Russian speakers are in the majority ( in Belarus, 70% of the population speaks Russian) and where they are very much in the minority (in Kazakhstan, 20% of the population speaks Russian).
It didn’t help that Vyacheslav Nikonov, a member of Russian President Vladimir Putin’s United Russia party, said on Russian television last December that “Kazakhstan simply doesn’t exist”; this statement angered the Nur-Sultan government, which demanded a retraction.
So far, relations between Russia and many of these states have been largely fraternal, with Russia providing security, if necessary, primarily through the Collective Security Treaty Organization (CSTO), a military alliance including Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia and Tajikistan. which was formed as a result of a treaty signed in 1992 by these post-Soviet states.
It was through the CSTO that Russian forces intervened in Kazakhstan in January and helped the government put down a protest movement, and the CSTO agreed to “reinforce” the borders that the Afghanistan shares with the Central Asian states members of the organization, after the United States withdrew from Afghanistan last August.
Belarus could also support and join Russia in the war against Ukraine due to its CSTO membership; no other CSTO member state has joined this war so far.
The Chinese Connection
Across Central Asia, governments are scrambling to rein in the instability resulting from Russia’s war in Ukraine. Kyrgyzstan, for example, quickly set up an anti-crisis committee.
On February 25, Putin called Uzbek President Shavkat Mirziyoyev to discuss the war and the crisis caused by Western sanctions; on the same day, Russian Prime Minister Mikhail Mishustin visited Kazakh President Kassym-Jomart Tokayev to talk about the decline in trade between the two countries and what it is likely to mean.
Russia is concerned about the impact of the war in Ukraine on the countries of Central Asia, largely because it has no solutions to the problems they will face.
China, on the other hand, is well positioned to play a key role in Central Asia in the years to come. China has already put in place a number of institutional arrangements that will become important in strengthening this relationship in the region, two important ones being the Shanghai Cooperation Organization and the Belt and Road Initiative (BRI).
On January 25, a “China plus Central Asia” meeting was held virtually between Chinese President Xi Jinping and the heads of state of Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan; it was to commemorate the growing ties between China and these countries over the past 30 years since the collapse of the USSR.
During this period, trade between China and Central Asia increased by 100%, with the largest volumes being China’s purchase of energy from post-Soviet republics. But this virtual conversation, which took place before the Russian intervention in Ukraine, has extended beyond trade along the Chinese Health Silk Road (established in 2016) and the creation of a regional trade hub in Urumqi, the capital of the Xinjiang Uyghur Autonomous Region.
At the height of the Covid-19 pandemic, Chinese investment in Central Asia slowed; now, the region is expected not only to return to pre-pandemic levels, but also to offset any losses north of the borders.
Central Asia has other options, including increasing trade with India, Iran and Turkey.
In January, India held the first biennial virtual summit with the five Central Asian republics, and these ties are expected to deepen over time. However, India, unlike China, shares no land border with any of these states, and its trade turnover ($2 billion) is much lower than China’s trade volume with Central Asia. ($9.2 trillion between 2013 and 2020).
Iran’s and Turkey’s trade relations with Central Asia are significant, but also relatively small, and trade relations that are important to these countries have already been incorporated into China’s BRI project.
The economies of the Central Asian republics are fundamentally integrated with that of Russia. China can provide some investment support, but it cannot so easily supplant the century-old Russian institutions that have played an important economic role in Central Asia. The Central Asian republics will struggle as sanctions tighten against Russia, but they will get some relief from the BRI and their regional partners (including Iran and Turkey).
No wonder Kyrgyz Foreign Minister Kazakbaev urged for mediation in Ukraine. His country wants this conflict to end and the severe sanctions to be lifted. Otherwise, economic distress will increase in a region that continues to be plagued by instability following the 20-year US occupation of Afghanistan, and economic hardship could lead to political unrest that could put the fire to the entire periphery of Central Asia.
This article was produced by Globetrotter, who provided it to Asia Times.
Vijay Prashad is an Indian historian, editor and journalist. He is editor and chief correspondent at Globetrotter. He is the editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a non-resident principal investigator at Chongyang Institute of Financial Studies, Renmin University of China. He has written over 20 books, including darkest nations and The poorest nations. His latest book is washington bullets, with an introduction by Evo Morales Ayma.