Where Europe and Asia meet
[b]In late May, a state delegation of Belarus — headed by Alexander Lukashenko — visited Kazakhstan. The President’s official trip to Astana was his second foreign tour after the elections (following a visit to Turkmenistan). The move spoke much of Minsk’s foreign political priorities at the moment. Belarus and Kazakhstan are moving ever closer — both politically and economically. During the talks at the Presidential Ak Orda Palace (which crowned the visit), Alexander Lukashenko and Nursultan Nazarbayev discussed their bilateral relations, while focusing on trilateral co-operation within the Customs Union and the future Single Economic Space. The joint economic potential of our two states is still less than Russia’s GDP, so Minsk and Astana clearly need to co-ordinate their positions to ensure the integration is based on equal rights [/b]A regular direct Minsk-Astana flight — launched this year — is to intensify relations between our states and citizens. Of course, Mr. Lukashenko and Mr. Nazarbayev have long established direct ties. In recent years, the heads of state have often met at various international forums, including in Astana (which, last December, hosted the OSCE Summit). However, Mr. Lukashenko last officially visited the capital (previously known as Tselinograd and Akmola) six years ago; ‘rare but right on target’ sums up the recent visit.
A regular direct Minsk-Astana flight — launched this year — is to intensify relations between our states and citizens. Of course, Mr. Lukashenko and Mr. Nazarbayev have long established direct ties. In recent years, the heads of state have often met at various international forums, including in Astana (which, last December, hosted the OSCE Summit). However, Mr. Lukashenko last officially visited the capital (previously known as Tselinograd and Akmola) six years ago; ‘rare but right on target’ sums up the recent visit.
“I can’t help but come to the man who has always supported the Belarusian nation in difficult times, and who continues to support us now,” Mr. Lukashenko said on meeting the President of Kazakhstan. “On those December days, you were the first to congratulate us on the results of the presidential campaign.” The Belarusian President also congratulated his Kazakhstani colleague on ‘his convincing win at the elections’.
The Belarusian Foreign Ministry has its own view on the present political relations of our two states, “Bilateral co-operation — as regards mutual understanding and respect — is now at its peak, allowing us to rely on each other, as necessary.” Such words are very important when viewed against Minsk’s address to the EurAsEC Anti-Crisis Fund; Astana is an important donor, alongside Russia.
Like Belarus, Kazakhstan is an active participant of all integration processes within the post-Soviet space. Simultaneously, its authority is growing within the international arena and within other organisations. Last year, it chaired the OSCE, becoming the first former Soviet state to have such an honour. Meanwhile, in 2011, Kazakhstan is chairing the Shanghai Co-operation Organisation. Moreover, it plans to assist Minsk in establishing contacts with this influential international organisation, which is becoming a true force.
The recent talks took place at the Ak Orda Palace, in Astana’s new centre, which resembles Dubai or Ashgabat. The majestic building, made from monolithic concrete, is surrounded by a tall forged fence. Everyone in Kazakhstan knows it — not because the Presidential Residence is situated there, but because the local 10,000 Tenge banknote (equivalent to $65) features its image.
Kazakhstan occupies ninth place worldwide for its size of territory. Meanwhile, its newspapers write: ‘The stability and tolerance of our society are our trademark — as is Saudi Arabia’s oil and champagne in France’. Its natural resources are equally spread across its huge territory, with 99 of the Mendeleev Table’s 105 elements found in Kazakhstan. Over 60 are mined or processed, while it leads globally for discovered deposits of zinc. It occupies second place regarding silver and third regarding copper while its deposits of oil and gas are significant (3 percent of global reserves of ‘black gold’ and 2 percent of all ‘blue fuel’).
Wisely using revenue from oil exports, Kazakhstan is now conducting a programme of forced industrialisation, with huge funds injected into industrial modernisation and the launch of new facilities. Belarusian enterprises, which boast huge experience of establishing assembly factories abroad, have an opportunity to help, as Mr. Lukashenko noted, “We’d like to join Kazakhstan’s grand plans and are ready to come and co-operate. We’ve almost no rival productions.” At the moment, joint projects worth over $100m are being realised in Kazakhstan.
Mr. Nazarbayev, in turn, expressed the readiness of Kazakhstan to participate in the privatisation of Belarusian enterprises. He is interested in machine building, petro-chemistry and agriculture. Evidently, the potential of our two states is much greater than that currently observed. New prospects are possible within the Single Economic Space, with Belarus hoping to receive Kazakhstan’s oil for processing. We expect all obstacles regarding transportation via Russia will soon be lifted.
27 ‘Road Map’ guides “You’ve come to us just in time,” noted Mr. Nazarbayev. “In 2009, [during the President of Kazakhstan’s official visit to Belarus — editor], we adopted a ‘Road Map’, unfolding our active co-operation. This should be developed further.” Mr. Lukashenko asserted that several dozen projects — outlined two years ago — are now being realised. Depending on how successful they prove to be, more should be added.
At present, eleven assembly facilities making Belarusian machinery operate in Kazakhstan. Three were launched this year, being real fruits of the co-operation laid out by our ‘Road Map’ of collaboration. According to Mr. Nazarbayev, 27 joint ventures are planned. Belarus’ Industry Minister, Dmitry Katerinich, has announced that, this year, over 1,500 Belarusian tractors and 300 combines are to be assembled in Kazakhstan. Since mastering virgin lands, Kazakhstan has been a ‘treasure’ for Belarusian agricultural machinery, becoming a true ‘unploughed field’.
Mr. Katerinich notes that 300HP tractors are to be assembled in Kazakhstan, with Minsk Tractor Plant signing a license agreement. “The document envisages that Kazakhstan’s representatives will visit Belarus in the near future to study issues relating not only to tractor supply. We plan to jointly set up assembly facilities, with our partners, to manufacture seeders, ploughs and other linkage-mounted machinery. It’s important for Kazakhstan to preserve its harvests. Accordingly, our guests will visit our plants — such as Lidselmash — to discuss possible assembly of elevators and grain dryers in Kazakhstan,” adds Mr. Katerinich. Additionally, two new models of Gomselmash harversters are to be launched in Kazakhstan.
Apart from the ‘Road Map’, another strong catalyst exists to Minsk-Astana co-operation: the economic integration processes which are gradually being realised jointly with Moscow. These take the form of the Customs Union, the Single Economic Space and the future Eurasian Economic Union. We can assert that Kazakhstan is more than just a strategic partner; it is an ally. “We have unique allied relations,” stressed Mr. Lukashenko.
Russia has always been viewed as Belarus’ ally. Our countries have achieved the highest level of economic interaction. Kazakhstani car traders at Minsk car markets are the first signs of the Customs Union. However, our two states have every reason to hope that greater advantages are to follow; to date, Kazakhstan accounts for just 2 percent of Belarus’ total exports but the trend is positive.
In 2010, our bilateral turnover more than doubled against 2009, reaching $870m. Walking through Astana, I came across a shop selling Belarusian furniture — called proudly ‘a salon’. Moreover, Belarus-made tractors, tyres, trucks and milk products are well known in this country. Trade of services brings in another $145m, with mutual trade exceeding $1bn. In the first quarter of 2011, a 1.5-fold rise was registered.
There are fears that Russia will force through the decisions it needs within the Customs Union and the Single Economic Space. With this in mind, co-operation between Belarus and Kazakhstan is vital. After his visit to Astana, Mr. Lukashenko spoke of his agreements with Mr. Nazarbayev, which state that ‘no large or small’ should exist within supranational bodies.
After chatting with his Kazakhstani colleague, Belarus’ Agriculture and Food Minister, Mikhail Rusy, said that Minsk and Astana jointly oppose Russia’s proposal to remove the veterinary service from the Customs Union’s external borders (with further devolvement of functions to customs organs). “We are strongly against this, as it goes beyond the limits of the Customs Union agreement and international veterinary norms,” he stressed, adding, “However, I think mutually beneficial solutions will be found.”
Imports of cars are also under scrutiny, as Belarus has no home production of passenger cars. It has been forced to agree to almost prohibitive fees on cars, with a similar situation planned for aircraft. Astana saw Belarus and Kazakhstan initiate their own plans to extend a privileged regime for aircraft imports into the Customs Union, until 2017. According to Belarus’ Transport and Communications Minister, Ivan Shcherbo, our two states need to renew their aviation fleets and plan to defend this position to Moscow.
Energy co-operation is another promising sphere within the future Single Economic Space (which will abolish duties and other artificial barriers). Minsk hopes to agree a transport policy with Russia. “The Single Economic Space ensures not only major possibilities but, also, obligations,” noted Mr. Lukashenko. Today’s issues relate to how best to pump Kazakhstani oil to Belarus, via Russian pipes. “If these matters of equal access to pipes and tariffs cannot be solved then a Single Economic Space won’t be needed,” stressed the Belarusian President in Astana. “It’s a kind of window to the world for Kazakhstan. We’d like Russia to compete with Kazakhstan as an oil supplier and we’ll co-operate with whoever offers the best terms. We would privatise our oil refineries and petro-chemical complex jointly with Kazakhstan but the interests of our large neighbour intersect, so we’ve chosen integration, with the aim of solving these issues within the Single Economic Space.”
The Chairman of Belneftekhim Concern, Igor Zhilin, admits that talks in Astana looked at access of Kazakhstani oil to the single transport systems, supplying Belarusian oil refineries. “Within our trilateral union, Russia has the task of developing our mechanism of interaction. With this in mind, our talks focus on the fact that we have a common interest in sending raw oil and gas to Belarus, including from Kazakhstan, as well as gaining equal access to transport systems,” he stresses, adding, “Kazakhstan has interest in Belarus as we have a powerful processing industry, which boasts good intellectual potential and proximity to markets. Until July 1st, we’ll be awaiting Russia’s proposals.”
Speaking of the price of Kazakhstan’s oil supplies, Mr. Zhilin notes that imports would be cheaper from there than from Russia for Belarus, if equal access to pipelines is ensured. The route would be shorter, so transportation costs would be lower. “The other issue is that it’s not profitable for us to process Kazakhstani oil, as an agreement with Russia is operational. We have to give export fees to Russia on all oil products exported from Belarus or processed here, even if they are sold to Kazakhstan,” explains Mr. Zhilin with sadness.
“We are eager to diversify oil supplies,” stressed the Belarusian Head of State in Astana. A joint declaration by the two presidents summed up the talks, stating that the priority is ‘to develop energy dialogue between Belarus and Kazakhstan, filled with practical contents — including preparations for signing a bilateral intergovernmental agreement on trade-economic co-operation in the field of oil and oil product supply to Belarus, taking into consideration our two states’ international obligations’.
Certain progress is obvious in this branch. In 2010, Belarusian oil refineries processed 615,000 tonnes of Kazakhstani oil products and residual oil. Around 8m tonnes of raw oil was pumped to the West, with Kazakhstan helping Belarus move towards greater energy independence.
Possibilities without obstacles
The President’s official visit to Kazakhstan ended at the Eurasian National University. An agreement was signed in Astana on the establishment of a scientific-educational consortium between our states’ higher educational establishments and scientific-research institutions. At present, 52 direct agreements are in force between the universities of Belarus and Kazakhstan. “I’m convinced that the formation of a scientific-educational consortium between our states’ higher educational establishments and scientific-research institutions will contribute to the implementation of joint advanced developments in the production branch. A corresponding agreement on its setting up was signed during the present visit, with 17 Belarusian higher educational establishments and scientific-research institutions participating; Kazakhstan is represented by 13 universities,” noted Mr. Lukashenko.
The Eurasian National University is to head the consortium on the Kazakhstani side. All students, lecturers and guests at the University are welcomed by a panoramic picture depicting Kazakhstan’s historical and modern figures, on horseback. Nursultan Nazarbayev is at the centre, having been heading the Republic since 1989. About fifteen years ago, a steppe was found instead of the University’s buildings, at the far end of Astana — known then as Akmola. After the provincial city became the capital in the late 1990s, its population rose from 300 to 700 thousand people. Ministries, company headquarters and universities are now situated there, with the centre rather resembling the City of London. Although Kazakhstan is a Central Asian Republic, local people always stress that it forms a geographical border between Europe and Asia. One of the largest banks advertises itself as ‘purely European’: a true quality mark for Kazakhstanis.
On lecturing to the University’s students and teachers, Mr. Lukashenko said that ‘co-operation with EU states is among the priorities of our foreign policy’ since the EU is the largest trading partner and investor. “It has much money — loans and so on — so there is no escape and no way round,” he said.
In a broad sense, relations with the East have been and remain a priority for Belarus’ foreign policy. This direction has been recently expanded via new organisational forms such as the Customs Union and the Single Economic Space. “The launch of the Customs Union and Single Economic Space should raise our relations to a whole higher level,” said the President, summing up the results of his talks in Astana. “We’re striving to see the joint customs territory as a window of possibilities, rather than an obstacle.”
By Igor Slavinsky