For U.S. Engagement in Central Asia, Pragmatic Economic Cooperation is Key
Author: Eugene Chausovsky
Mar 21, 2023
As Russia’s war in Ukraine drags on and continues to ripple out globally, the region of Central Asia is emerging as an increasingly active zone of competition between Moscow and the West. Central Asian states have received growing attention from the United States and Russia in recent months, with U.S. Secretary of State Antony Blinken paying a visit to both Kazakhstan and Uzbekistan Feb 28-Mar 1 for high-level meetings and a C5+1 ministerial summit. In the meantime, Moscow has worked to strengthen its own connections with these two countries, including the pursuit of a trilateral natural gas union with Astana and Tashkent.
Given the reverberations of the Ukrainian conflict and the strategic importance of these Central Asian states from an energy and broader economic perspective, it is imperative for the United States to not view this competition with Russia as a zero sum game. Instead, the United States and its allies should focus on areas of constructive and mutually-beneficial cooperation with Kazakhstan and Uzbekistan, including on key issues like green energy and sanctions compliance. In this way, Washington can not only offer a viable alternative to Moscow’s designs in the region but also contribute to the sustainable development of these Central Asian countries for the long term.
When it comes to the West’s strategy in countering Russia over its war efforts in Ukraine, a key part of this strategy has been to isolate Moscow from the international system. The United States and the EU have passed sanctions against Russia, while also accelerating their efforts to diversify away from their economic ties to Russia. This is especially the case in the energy sector, with Russia’s oil, natural gas, and coal exports making up nearly half of its budget revenues and fueling its military expenditures in Ukraine. The United States and the EU have made key strides towards such diversification, with the United States phasing out Russian energy imports last year, while the EU has cut oil and coal imports and is transitioning away from Russian natural gas over the next few years.
However, this Western isolation strategy of Russia has not been supported globally. Over the course of the past year, Russia has actually increased economic - and especially energy - ties with many non-Western countries, including China, India, Türkiye, and the Gulf states. This is not because these countries necessarily support Moscow’s war in Ukraine; indeed, Türkiye has actively spoken out against it, while India and the Gulf states are more measured. Rather, it is out of their national interest to maintain economic stability, which could be undermined if they abruptly cut off energy and other economic ties with Russia. It is also in their interest to maintain autonomy in their foreign policy, rather than siding completely with either Moscow or the West.
This dynamic has also applied to the Central Asian region. None of the Central Asian states has directly supported Russia’s war in Ukraine, with each country abstaining on the issue of the war during UN votes, while Kazakhstan’s President Kassym-Jomart Tokayev has even supported Ukraine’s territorial integrity in the presence of Russian President Vladimir Putin. Yet at the same time, Central Asian countries have not only maintained but indeed strengthened economic ties with Russia since the Ukrainian conflict began. Russia’s trade with Kazakhstan grew by over 10 percent in the first ten months of 2022, while growing by 40 percent with Uzbekistan in the first 9 months.
There are both structural and practical reasons for these resilient economic relationships. Structurally, Central Asian states have deep and long-standing economic ties with Russia, whether that be in the form of their integrated energy and transport infrastructure or the billions in remittances that are sent by Central Asian migrants working in Russia. Practically, significantly reducing or cutting off ties with Moscow could undermine or weaken Central Asian governments, particularly as economic pressures have driven political instability and even large-scale protests in countries like Kazakhstan.
However, this is not to say that there is no potential for the United States to increase ties with Central Asia. Indeed, Kazakhstan has emphasized its ‘multi-vectoral’ foreign policy, in which it engages with and balances among a number of different external players, including China, Türkiye, the West, and the Gulf states. Uzbekistan has taken on a similar approach, though both Astana and Tashkent are wary of the political conditions of greater engagement with the West, particularly when it comes to issues like promoting human rights and democracy.
While it is certainly in the interest of the United States to promote such issues and help Central Asian states build institutional capacity, this approach does not have to be mutually exclusive from more pragmatic and constructive forms of collaboration. For example, the United States can provide temporary sanctions waivers and other forms of relief to make sure that its standoff with Russia does not unnecessarily hurt the economies of Central Asia. Indeed, the U.S. Treasury Department recently announced it would remove sanctions on a Kazakh subsidiary of Russia’s Sberbank following its change in structure to be completely owned by a Kazakh company. Blinken also stated during the C5+1 meeting that “economic spillover effects” of sanctions were discussed, and that the United States should carefully calibrate sanctions to make sure they are as targeted as possible.
Just as importantly, the United States should increase its engagement in the energy sector of Central Asia, particularly when it comes to renewable energy. While Russia seeks to build up its connections to Kazakhstan and Uzbekistan’s oil and gas sectors, the United States could ramp up its green energy cooperation in the region, including in areas like solar, wind, and emerging fields like green hydrogen. Central Asian countries are strongly interested in increasing technology transfers in this sector, and greater U.S. cooperation and investment in this area could go a long way towards fueling economic growth while reducing fossil fuel reliance and meeting climate transition objectives.
To be sure, the United States already has existing energy and other economic programs in Central Asia, and the U.S. State Department issued its “readiness to actively support projects to improve the climate resilience of vulnerable sectors and the transition to a low-carbon and ‘green’ economy” following the C5+1 meeting. However, it is important for Washington to follow through on such a pledge with concrete projects, and the $25 million pledged in economic support during Blinken’s visit is woefully inadequate. Washington can work, along with its allies in the EU and Asia and the financial support of international financial institutions like the IFC and EBRD, to support the capacity building of the Middle Corridor route to ensure greater connectivity not only in Central Asia but also in the Caspian region overall, with a focus on green and high-tech projects.
It is through such pragmatic and multilateral forms of cooperation that the United States can build its ties with Central Asia in ways that are mutually beneficial. Such cooperation will not only help the United States compete with Russia and offset the ‘The West vs the Rest’ narrative that the Kremlin uses to continue to fuel its war in Ukraine, but it will also contribute to the political and economic development of Kazakhstan, Uzbekistan, and other Central Asian states while addressing global challenges like climate change.
Eugene Chausovsky is the Senior Director for Analytical Development and Training at the New Lines Institute.
Chausovsky previously served as Senior Eurasia Analyst at the geopolitical intelligence firm Stratfor for more than 10 years. His analytical work has focused on political, economic and security issues pertaining to Russia, Eurasia, and China, as well as global connectivity issues related to energy and climate change.
He has contributed articles to a wide range of outlets including Foreign Policy, The National Interest, the Wall Street Journal, Forbes, and Al Jazeera and has given interviews to global media outlets such as BBC, CNBC, Bloomberg, Politico, and CNN. He has also organized crisis simulations and delivered client briefings to numerous international organizations and businesses, including Fortune 500 companies.
Chausovsky holds a Masters of International Public Policy from the Johns Hopkins University School of Advanced International Studies and a BA in International Relations from the University of Texas at Austin. He tweets at @eugenechausovsk.