Russian Bear and Chinese Tiger Prowl for Footholds in Kazakhstan

By Burton, Douglas | The World and I, January 2005 | Go to article overview

Russian Bear and Chinese Tiger Prowl for Footholds in Kazakhstan


Burton, Douglas, The World and I


Douglas Burton has worked as an editor of Insight on the News and is freelance writer based in Greenbelt, Maryland.

ALMATY, Kazakhstan

It is said that President Nursultan Nazarbayev wakes up every day in Astana, his spanking-new capital, and hears the growl of a Russian bear to the north and the roar of a Chinese tiger to the East. And these days, he frequently finds Uncle Sam at his front door holding an empty gasoline can.

A sprawling expanse of steppes, mountains, and deserts, this country extends from the eastern limits of Europe to the western border of China. It is four times the size of Texas but has just 15 million inhabitants, compared with the estimated 22 million in "the Lone Star State." Russia and China are interested in expanding their footholds in this oil-rich country, but Nazarbayev makes overtures to the United States and Europe to counterbalance his heftier neighbors.

Alone among the nations of Central Asia, Kazakhstan has a booming economy, a stable political culture, and the potential to be one of the world's petroleum powerhouses within 10 years. With proven oil reserves of 35 billion barrels--twice the volume of the North Sea fields--its projected oil reserves in the Caspian Sea are three times that amount.

The head of Kazakhstan's state oil company announced last August that the country may triple its yearly oil output by 2015, according to CBSMarketwatch.com. Uzakbay Karabalin, president of KazMunaiGaz, said the country expects to triple oil output by 2015, pumping between 1.2 billion and 1.3 billion barrels annually, compared with 396 million barrels last year. Most of the increase would come from the TengizChevroil, a joint venture with ChevronTexaco, and giant Karachaganak and North Caspian projects, he said.

Recent geological findings indicate that a decade from now, this former hinterland of the Soviet Union will be one five top oil producers in the world. American companies are in the forefront of the exploration: More than 100 have invested there, accounting for $9 billion of $26 billion of foreign investment overall.

"Kazakhstan is unique among the Central Asian nations in that, with GDP growth rates of 9 percent and more every year for the last four years. It has a high economic growth rate that is sustainable, and it spills over into the non-energy sector," said Ariel Cohen, a Eurasian-affairs specialist at the Heritage Foundation, a Washington, D.C. think tank. "True, the economic model is not Western; it is more statist, along the lines of Singapore and South Korea," he conceded.

Russia's economic ties to Kazakhstan grew closer August 27 when the foreign ministers of the four members of the Central Asian Cooperation Organization--Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan-- ratified Russia's entry into their two-year-old economic bloc. That move, and ratification by the Uzbek parliament in August of a strategic partnership with the Kremlin, signal Russia's reintegration with Central Asia.

Nazarbayev is taking every opportunity to flex his nation's newfound political and economic muscle. Kazakhstan is quietly campaigning to chair the Organization for Security and Cooperation in Europe (OSCE), which has never been led by a former Soviet state. The OSCE includes all European and Eurasian countries, plus the United States and Canada.

Kazakhstan belongs to a bloc in the OSCE--with Russia, Belarus, Turkmenistan, Uzbekistan, Tajikistan, and Kyrgyzstan--that would like the OSCE to refocus its mission more on economic aid and fighting Islamic terrorism and drug trafficking, rather than its present emphasis on fair elections, a free press, and freedom of religion.

Among these seven post-Soviet states in the OSCE, Kazakhstan, is one of the most economically advanced and has a better human-rights record than the other six. The decision is to be made in 2006. That bid has ruffled feathers in some Western European capitals, where diplomats challenge the qualifications of this fledgling democracy for such a post. …

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Russian Bear and Chinese Tiger Prowl for Footholds in Kazakhstan
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