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Land-locked Central Asian Oil Country Plays Important Role from Vancouver to Vladivostock

Commodities / Crude Oil Jan 21, 2010 - 12:57 PM GMT

By: OilPrice_Com

Commodities Best Financial Markets Analysis Article2010 is starting with a decision that faced heated debates: Kazakhstan will hold the chairmanship of the Organization for Security and Co-operation in Europe (OSCE) for one year, despite what many considered as a questionable political and democratic track record. With 56 participating States from Europe, Central Asia and North America, the OSCE is the largest regional security organization in the world.


The Organization deals with three dimensions of security - the politico-military, the economic and environmental, and the human dimension. Thus, the OSCE can play an important role for early warning, conflict prevention, crisis management and post-conflict rehabilitation though its decisions are politically, but not legally binding.

The reasoning behind choosing Kazakhstan in such a context was first that the OSCE chairmanship could serve as a strong incentive for Kazakhstan to make good on its promises of reforms, notably in support of democratic principles. Second, by choosing for the first time a country from the Former Soviet Union space that has maintained reasonably good relations with all the former Republics, the hope is that Kazakhstan could have some leverage when dealing with crisis management such as in the Caucasus.

Third, Kazakhstan is also a moderate Muslim country that has been a strong advocate of multi-confessional and interethnic dialogues: at a time of growing tension with the Muslim world, Kazakhstan’s conciliatory approach could foster a better dialogue with OSCE countries and beyond. Fourth, being blessed with large oil & gas resources and thus familiar with Russia’s control over energy export routes. Kazakhstan could play an important role as a mediator to tackle energy security issues involving the Russian Federation and European countries. Fifth, it is in a better position to understand the issues involving countries of the former Soviet space in light of their past shared history, and would be a country without direct stakes when dealing with some issues involving European countries.

Taking its role seriously

Kazakhstan is well aware that by being granted the chairmanship it will be subject to intense scrutiny and that achieving some results would be a grand coup. It is therefore not surprising to see the function of the Chairperson-in-Office (CiO) befall upon the experienced Kazakhstani Minister of Foreign Affairs, Kanat Bekmurzayevich Saudabayev, who timely replaced the prior Minister of Foreign Affairs in September 2009. After an extensive diplomatic career that took him as an ambassador to Turkey, the United Kingdom and more recently to the United States from 2000 until 2007, Saudabayev was appointed Secretary of State of the Republic of Kazakhstan, a critical position within the government that he will continue exercising.

Mr. Saudabayev belongs to the inner circle of President Nursultan Nazarbayev and his nomination as Foreign Minister sends a strong signal to the importance given to the OSCE chairmanship. Saudabayev took an active part in preparing his country for that important mission and declared: “our priorities will include strengthening the European security architecture, developing transit and transport potential, stabilizing OSCE regional partner, Afghanistan, and promoting tolerance and peaceful coexistence in diverse societies, a very timely subject for Europe.”

Advocating Regional Cooperation

Regional cooperation means predictability and stability that are conducive to much needed foreign investment, notably in the Greater Central Asia region. Because of its geographical location, Kazakhstan can play a central role in tackling regional issues that have become global issues. They include: water management and the fight against environmental disasters such as and the disappearance of the Aral Sea; the stabilization of Afghanistan; the fight against drug trafficking and transnational crime; transportation issues that range from easing oil & gas transit to the addressing debilitating delays in the transit of persons and goods at border crossing due to cumbersome customs procedures, etc.

Kazakhstan also benefit from its unique understanding of what it means to be a landlocked oil country and a zone of interest to many countries. Kazakhstan is heavily dependent on regional and international cooperation to get its oil & gas out the ground and delivered to end-users. Over time, Kazakhstan has learned to maintain a privileged and cordial working relationship with Russia while at the same time reaching out westward towards Europe and the United States. President Nursultan Nazarbayev has set some ambitious long-term development goals such as in “Kazakhstan 2030” and as most of them are funded through revenues streaming from the export of natural resources, diversification of export routes and markets are critical. The OSCE and Europe’s vision of energy security through supply security, notably through the diversification of export routes, which could lead to bypass Russia, is one shared by Kazakhstan.

What imprint can Kazakhstan have during its chairmanship?

Kazakhstan takes pride in its multi-vector foreign policy and its balanced relationship between its two powerful neighbors, Russia and China, while at the same time fostering greater economic and security collaboration with the United States and Europe. Kazakhstan could to a certain extent bring to the OSCE it expertise in balancing relationships with powerful partners without sacrificing its own interests. For instance Kazakhstan could deal with territorial integrity issues involving Nagorno-Karabakh, Abkhazia, South Ossetia, Transnistria and bring Russia, Georgia, Azerbaijan, Armenia and Moldova to the negotiating table.

Kazakhstan could also play an important uniting role by coordinating and avoiding the duplication of efforts of the organizations it belongs to such as the Commonwealth of Independent States (CIS), the Collective Security Treaty Organization (CSTO), and the Shanghai Cooperation Organization (SCO) with larger organizations such as the Asian Development Bank (ADB), the World Bank, or regional programs such as the Central Asia or the Regional Economic Cooperation (CAREC) program which focuses on energy, transportation and trade issues. For instance, such coordination could apply to all the international reconstruction efforts conducted in Afghanistan, a country which Saudabayev considers a top priority: "without the stabilization of Afghanistan it's impossible to talk about stability in our region, but more generally about stability and security well beyond our region, so Afghanistan should be the main focus of international efforts."

Though Kazakhstan may not yet lead by example on the domestic political front, it has taken bullish and laudable initiatives that give it some authoritative edge on important issues such as disarmament and foreign assistance. For instance, Kazakhstan renounced to its nuclear arsenal, curtailing the risk of nuclear equipment and technology falling into the wrong hands. Kazakhstan has also provided financial support to its impoverished neighbors such as Kyrgyzstan and Tajikistan. In November 2009, Kazakhstan committed $50 million to enable 1,000 young Afghans to come study in Kazakhstan.

Saudabayev declared on January 1, 2010 that "As OSCE Chair, Kazakhstan will seek to bring closer the positions of participating States both west and east of Vienna, based on the principles of impartiality and balance, and to advance the Organization's role in strengthening security and deepening co-operation in the area from Vancouver to Vladivostok."

Its candidacy having been strongly supported by Russia, Kazakhstan will play a valuable go-between role, notably on energy and territorial disputes involving Russia, as it would get more easily Moscow’s ear. Ultimately, Kazakhstan will most probably be able to foster greater overall dialogue but achieving concrete results in just one year with many dissenting countries remains beyond its control and will depend on the willingness of other countries to play along.

Originally published at: http://www.oilprice.com/article-landlocked-central-asian-oil-country-plays-important-role-from-vancouver-to-vladivostock.html

This article was written by Philip H. de Leon for OilPrice.com who have recently launched a Free Market Intelligence Report which focuses on unique Geopolitical and Investment News which enables readers to spot trends and events in the marketplace and reduce investment risk. To find out more visit: http://www.oilprice.com/Market-Intelligence-Report.php

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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