Meet the Neighbors: How Central Asia And South Caucasus Are Reacting to Special Operation in Ukraine

From Ekspert, April 18, 2022, p. 64. Condensed text:)

. . . Russia’s special operation in Ukraine [see Vol. 74, No. 8, pp. 9‑13] has put former Soviet states in an extremely difficult situation. Integration alliances under the aegis of Moscow have come to include a significant portion of the post-Soviet space, [which] depends on the Russian economy, trade ties and security guarantees. However, like Russia, these countries are integrated into the global economy.

Members of the Eurasian Economic Union (EaEU) are already sustaining losses. According to estimates by the European Bank for Reconstruction and Development (EBRD), Kyrgyzstan’s economic development will decline by about 1% as a result of anti-Russian sanctions. Earlier, EBRD specialists forecasted 5% growth. Tajikistan’s projected gross domestic product growth will fall from 6.2% to 3%; Kazakhstan’s – from 3.8% to 1.8%; and Armenia’s – from 5.3% to 1.6%.

As was the case earlier with the Crimea, the [political] elites of post-Soviet countries have not spoken out openly against Russia, but they have also distanced themselves from Moscow’s policy. For example, a month after the special operation began, all post-Soviet republics except Belarus abstained or stayed away from the vote on an anti-Russian resolution at the UN General Assembly.

First, post-Soviet countries are afraid of incurring economic restrictions from the West. Second, the events in Ukraine have stirred or activated deep-seated fears in the public consciousness in some Caucasus and Central Asian republics. [People] are afraid that Moscow will try to play the “ethnic card,” subsequently introducing troops and limiting the sovereignty of those states.

Maneuvering difficulties.

At the beginning of 2022, Russian forces effectively prevented a coup d’état in Kazakhstan [see Vol. 74, No. 1‑2, pp. 10‑15]. At the time, this left hanging the question of what Moscow would ask in return. However, Russia’s key Collective Security Treaty Organization (CSTO) ally [Kazakhstan] is holding a pointedly ambivalent position right now.

At a meeting with European Union leaders in Brussels, Timur Suleimenov, the [Kazakh] president’s deputy chief of staff, vowed that his country would not become a platform for bypassing anti-Russian sanctions. At the same time, he described Kazakhstan as “the most Westernized country in Central Asia” and promised to do everything to expand cooperation with Europe.

A little later, [Kazakh] Foreign Minister Mukhtar Tleuberdi said at a meeting with reporters that Kazakhstan will never recognize the independence of the [self-proclaimed] Donetsk and Lugansk people’s republics (DPR/LPR). Finally, on April 4, in an article titled “Turbulence Across Eurasia Will Not Slow Kazakhstan’s Progress,” published in The National Interest, President Kasym-Zhomart Tokayev called for “for a swift and just resolution of the conflict in accordance with UN Charter,” and reminded American readers that his country respects Ukraine’s territorial integrity.

In addition, the authorities have set up coordination centers in Almaty and Nur-Sultan where Kazakhs can send donations for humanitarian assistance to Ukraine. Every day, the republic is providing several [metric] tons of medicine, food and clothing to Ukrainians affected [by the war].

In the first several days, public rallies in support of Ukraine took place in Almaty; according to some sources, they were attended by about 2,000 to 5,000 people. It is noteworthy that those events were approved by the authorities. Later, however, law-enforcement and security forces received orders to disperse such demonstrations. More recently, police began to detain both pro-Ukrainian and pro-Russian activists.

It also became known that Kazakhstan will not hold a Victory Day parade “due to budget constraints, as well as other priorities.” It would be interesting to know whether the Immortal Regiment march, which is “free” for the [state] budget, will be allowed.

Public opinion surveys show that Kazakhs tend to sympathize with Moscow, but the majority opts for neutrality. According to Demoscope polls, only 10% of respondents unequivocally supported Kiev, including 20% of Kazakh speakers and just 6% of Russian speakers. A total of 39% of citizens approve of Russia’s actions. Almost half of Kazakhs (46%) maintain neutrality.

Six percent of respondents chose to support Ukraine and advocate developing partnership relations with Western countries, while 36% support Russia and cooperation in the framework of the EaEU. Thirty-nine percent of respondents opted for neutrality.

And here is the bombshell: A quarter of Kazakhs believe that a similar military conflict between Russia and Kazakhstan is possible (38% of Kazakh-speaking respondents [believe that], while significantly fewer Russian speakers do: 9%). Sixty-five percent are convinced that such a conflict is impossible. . . .

Problems of Kazakhstan’s economic choice.

Russian-Kazakh economic ties are closely intertwined. Almost all Kazakh exports to the West are sent via the Russian transit system. Some products are shipped at Russian ports, but since sanctions were introduced, major shipping companies have been refusing to accept goods, including from Kazakhstan. As a result, Nur-Sultan is sustaining heavy losses.

“Sanctions could nullify Kazakhstan’s infrastructural value,” Rustam Burnashev, an expert on international relations and professor at German-Kazakh University, told Ekspert. “East European countries want to limit operations at border crossings and railway transit with Russia. That would halt transportation flows along the Silk Road, which passes across our country’s territory, and would also reduce Eurasia’s logistical connectivity.”

In addition, economic restrictions could create a temporary shortage of Western consumer goods in Kazakhstan: Previously, a share of Kazakh imports of Western goods came from Russia. After many brands left the Russian market, Kazakhstan would probably have to change shipping routes. . . .

That would lead to a reduction in Russian-Kazakh trade volume, the expert is confident. Last year, trade turnover was more than $24 billion, including $17.3 billion in Russian imports. By comparison, trade turnover with China in the same period was $18.1 billion.

Since the geopolitical situation escalated, the Kazakh tenge has plummeted along with the Russian ruble. The national currency dropped overnight to a record low (from 430 to 512 to the dollar). To stabilize the rate, the National Bank had to inject around $1 billion into the foreign exchange market. Taking his cue from Moscow, Tokayev forbade [Kazakh] citizens to take more than $10,000 out of the country: That led to a temporary surge in demand and a shortage of foreign currency, and even private purchases of foreign currency in the capital were suspended.

The oil factor also plays a role. Oil accounts for 60% of Kazakhstan’s exports, [and] the share of oil and gas revenues in the national budget is over 40%. Foreigners are widely represented in Tengizchevroil, the country’s largest oil producing company. The combined share of Chevron and ExxonMobil is 75%, while Russia’s Lukoil holds a mere 3% of the stock. Taking into account the US oil embargo on Russia, the importance of Kazakh oil on the global market will only grow.

At the same time, over 80% of oil exports move via the Caspian Pipeline Consortium (CPC), which runs across Russia to the Black Sea port of Novorossiisk. Even though the US Treasury promised that the ban on Russian oil imports will not affect the CPC, operating risks remain. . . .

In the morning, pro-Ukraine; in the afternoon, pro-Russia.

Unlike affluent Kazakhstan, Kyrgyzstan and Tajikistan have less room to maneuver in the international arena and in domestic politics.

Kyrgyzstan has officially assumed a neutral stance. Although the authorities did not assent to Moscow’s recognition of the DPR/LPR’s independence [see Vol. 73, No. 8, pp. 3‑8], Bishkek took an understanding view of that decision. Kyrgyz President Sadyr Zhaparov wrote on his Facebook page that “it was a forced measure to protect the civilian population of the Donetsk Basin, where a large number of Russian citizens live.”

The Kyrgyz and Tajik authorities are refraining from giving public assessments of actions by Moscow or Kiev. Such circumspection is understandable: Bishkek and Dushanbe do not want to become involved in somebody else’s conflict and jeopardize their fragile economies, which are heavily dependent on remittances by labor migrants from Russia.

For example, last year Kyrgyz migrant workers sent about $2.7 billion back home, which is $1 billion more than Kyrgyzstan’s total export [revenue], [and] over 30% of [its] GDP. Now, according to World Bank estimates, Kyrgyzstan will lose 30% in [migrant] remittances, and Tajikistan 22%, due to the fall in Russia’s GDP.

The two poorest republics in the region are equally concerned about security issues. Russia is the main guarantor of the inviolability of those countries’ external borders, given their dangerous proximity to Afghanistan. . . .

Tajikistan’s perennial leader is preparing to hand over power to his older son, Rustam Emomali, the speaker of the upper house of parliament, in a calm political atmosphere. So the current authorities are not interested in seeing Russia’s position in the region weakening either. . . .

The Caucasus dilemma.

The capitals in the Caucasus have also distanced themselves from the Ukraine crisis. Like many Central Asian republics, Baku and Yerevan have not taken an unequivocal stance on the special operation, limiting themselves to token statements about the need to resolve the conflict as quickly as possible, “based on the norms and principles of international law.”

Azerbaijan’s and Armenia’s neutrality in the current crisis is predetermined by the Nagorno-Karabakh conflict. Just a couple of years ago, Azerbaijanis and Armenians plunged into a bloody battle for the disputed territory. It was only after Russia intervened and deployed its peacekeeping forces in the region that hostilities ceased [see, respectively, Vol. 72, No. 39‑40, pp. 3‑6, and No. 46, pp. 9‑13].

And although a full-fledged Azerbaijani-Turkish military-political tandem effectively emerged after that war, Baku has to synchronize watches with Moscow on many issues. In the context of the Karabakh problem, the Azerbaijani authorities have repeatedly stressed the friendly nature of relations with Russia. And just before the start of the special operation in Ukraine, [Azerbaijani] President Ilkham Aliyev unexpectedly signed a declaration on allied interaction with [Russian President] Vladimir Putin.

Experts believe that Baku is hoping to cajole Moscow so that after the five-year period stipulated in the peace agreements with Yerevan, Russia will not deter the Azerbaijani authorities from reestablishing control over the remaining part of the rebellious region.

At the same time, unlike the elite, Azerbaijani society is largely sympathetic toward Kiev in the current crisis. In late February, a mass rally (by local standards) took place in front of the Ukrainian Embassy in the capital, where the slogan “Glory to Ukraine!” was chanted together with “Putin, get out of Karabakh!” Whether the event was approved by the authorities is a big question. . . .

Armenia has found itself in a rather vulnerable position. Despite Yerevan’s heavy dependence on Moscow’s economic and military-political assistance, the Armenian authorities cannot side with Russia in the Ukraine crisis. They are afraid of losing economic and public-relations support from their Western sponsors.

Conversely, the Armenians do not want to jeopardize their allied relations with Russia by choosing the West. “Of course, the option of peaceful interaction between Russia and the West suits Armenia the best. This is the only way Yerevan can freely communicate with both Moscow and Western capitals,” Aleksandr Iskandaryan, director of the Caucasus Institute [in Yerevan], explained to Ekspert. “Armenia’s official political trend is complementarianism, which makes it possible to maintain relations with international actors without turning the country into a battlefield. This is extremely difficult for the Armenian authorities to do in the current international crisis.”

Overall, Armenian society takes a positive view of what Russian troops are doing on Ukrainian territory. Pro-Russian rallies are regularly held in the [Armenian] capital. Polls show that 63% of respondents approve of Moscow’s recognition of the DPR’s and LPR’s independence. At the same time, over 90% of Armenian citizens take a favorable view of Russians moving to the republic.

Between a rock and a hard place.

When Russia launched the special operation in Ukraine, neighboring countries suddenly woke up in a new geopolitical reality, where Moscow remains a major economic partner and at the same time a toxic ally in the pro-Western geopolitical context.

Eventually, Russia’s trade and economic role in Central Asia will likely begin to decline – something that neighboring China would inevitably take advantage of. And Beijing’s plans are draconian: By 2030, it plans to build up the volume of trade with this group of countries from $38 billion at present to $70 billion (Russia’s current volume of trade with Central Asia is about $36 billion).

Some experts believe that geopolitical uncertainty will prompt the Central Asian elites to develop alternative routes to transport goods and energy resources to Western markets.

On the other hand, Russia would inevitably redirect export flows and logistics routes from Europe to Asia. Naturally, Moscow’s interest in logistics routes via the Caucasus and the Caspian Sea to Iran would grow. The transportation corridor from Azerbaijan to Turkey is becoming important to [Russia].

Moscow could also step up activity on the Pakistani track, with the prospect of creating logistical corridors via Afghanistan to the Indian Ocean. If this goal is achieved, Russia and Central Asian countries would have a mutual interest in enhancing cooperation, including by setting up export-oriented joint assembly plants.

Depending on the length and intensity of Russia’s economic decline, labor migration routes would also gradually shift toward Turkey, Europe or the Persian Gulf.

Granted, the Russian economic crisis could give post-Soviet countries additional opportunities. Since the start of the special operation, thousands of Russian IT specialists have moved to Armenia, Georgia, Kazakhstan and Kyrgyzstan, where shell companies are being registered to bypass sanctions [and] production is being localized.