How Over 100 Days of War in Ukraine has Changed the Caspian Region
Author: Daniel Lehmann
Jun 24, 2022
It has been just over four months since Russia’s invasion of Ukraine began, and in that relatively brief period, Russia has irreconcilably and irreversibly harmed its position of authority in the former Soviet space. On February 24, Russia began to strike Ukrainian targets while President Putin delivered a revisionist speech attacking the very concept of Ukraine as an independent state. The significance of the moment was not lost on the world, and the global community watched as Ukrainians resisted a blitzkrieg offensive that has since turned into a slow, grinding, bloody fight. These four months have left Ukraine inexorably changed, as Ukrainians have rallied around their leader and armed forces and borne the brunt of Putin’s brutal adventurism. Still, Ukraine is not the only country that has had to adapt and respond to Russia’s war. The effects of the war are most profoundly felt by the Ukrainian people; but sometimes overlooked, the invasion has left lasting changes in the South Caucasus and Central Asia, too, causing a paradigmatic shift for much of the region.
In the early days of the war, the international community responded to Russia’s actions with condemnation and sweeping economic sanctions. Many world leaders voiced their outrage. The countries of the South Caucasus and Central Asia took a slightly different tact. Only Georgia voted in favor of the United Nations General Assembly resolution condemning Russia’s invasion, while the rest of the region either abstained or did not vote at all. In some ways, this vote set the tone for the South Caucasus and Central Asian states’ policy on Russia’s invasion. The states have been careful to walk a fine line, urging peace and providing humanitarian support for Ukraine, but falling short of openly condemning Russia’s invasion or of providing their own military aid to Ukraine. The foreign minister of Kyrgyzstan, who met with Ukraine’s ambassador and voiced support for the territorial integrity of states, and the long-serving foreign minister of Uzbekistan, who declared that Uzbekistan did not recognize Russia’s claims in Donetsk and Luhansk, both found themselves replaced.
Leaders and officials from the region have stated that they intend to comply with sanctions on Russia, and Western officials have made it clear that while they expect Russia’s neighbors to prevent sanction-dodging, the United States and its partners appreciate the region’s difficult position.
In the early days of the war, there was concern that Russia would use the Collective Security Treaty Organization (CSTO) to augment its own forces. Thus far, the CSTO has not been called into the conflict, and given the internal structure of the organization, there could be obstacles to bringing the organization into the fight. However, Russia has demonstrated that it is not averse to breaking rules, norms, customs, or laws, and as Russian casualties and materiel losses mount, concern about the Kremlin invoking the CSTO help will remain. If Russia brought the CSTO into the conflict, this could potentially include forces from Belarus, Armenia, Kazakhstan, Kyrgyzstan, and Tajikistan; however, none of the countries mentioned have indicated any interest in sending their militaries into the fray.
Russia’s invasion has left Central Asia and the South Caucasus in an uncomfortable position; however, it has also renewed European, U.S., and general international interest in greater engagement with the countries of the region. The middle corridor or trans-Caspian corridor, a transit route that connects China with Europe through Kazakhstan, Azerbaijan, Georgia, and Turkey, has seen a surge in traffic as companies look to avoid routes through Russia. Western governments are taking a serious look at increasing the supply of Caspian oil and natural gas that they can receive.
Additionally, with Russian industries under sanction, Europe and the United States are looking to wean themselves off the import of Russian critical resources like rare-earth minerals and uranium. Central Asia happens to have an abundance of uranium and an underdeveloped rare earths sector that is ripe for investment.
Moreover, young, educated Russians, especially in the tech sector, have been leaving Russia in droves to avoid the fallout of their government’s invasion. Many have based themselves, at least temporarily, in Central Asia and the South Caucasus. For the region, the presence of young, well-educated Russians could be a boon for their growing tech industries, but countries must also be careful to prevent Russian emigrees from using the region’s banking systems to circumvent sanctions.
Russia’s newfound alienation from Western economies has created opportunities for some sectors in the Caspian region, but it also leaves people vulnerable to the secondary and tertiary effects of sanctions on Russia. The World Bank and other international financial institutions have warned that Russia’s self-inflicted isolation has caused, and will continue to cause, regional economic contraction. Large numbers of labor migrants from Armenia, Azerbaijan, Kyrgyzstan, Tajikistan, Uzbekistan that typically find work in Russia have returned to their home countries and will now need to find jobs elsewhere. Russia is also a major economic partner for countries in the region that do not send as many labor migrants. Russia is a top export destination and source of imports for the region, so as sanctions and the war harm the Russian economy, production capacity, and consumption habits, Central Asia and the South Caucasus will also struggle.
Russia is also an important exporter of fertilizer and food goods, as is Ukraine. International organizations like the UN have raised alarms about the prospect of food crises and famine throughout the developing world. Kazakhstan is also a major food-goods exporter and has imposed restrictions on its grain exports to prevent domestic shortages. Globally, the price of food goods is rising, and the Caspian region is no exception. Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, and Uzbekistan currently face some of the largest decreases in real household income because of corn and wheat price inflation in the world. Rising food prices and shrinking economies, historically, make for a worrisome combination.
The countries of Central Asia and the South Caucasus have dealt with Russia for the past 30 years, often as a partner but sometimes as a threat. The countries of the region cannot afford to run afoul of Russia, but they now run the risk of becoming shut out from the international community if they cooperate to closely with their neighbor to the north. The open hostility between Russia and the West has created some opportunities for the Caspian region to fulfill its potential as an energy and transit hub, but the governments in the region must walk on a knife’s edge and uphold the standards of good governance to succeed, because Russia’s invasion undeniably has upset the fragile balance of the region and created new and dangerous pitfalls.
For the past 30 years, the countries of the region have sought to establish independent foreign policies that protect their own interests and sovereignty while working with all major partners, whether it be China, Russia, the United States, or the EU. Russia’s invasion makes this type of ‘multi-vectored foreign policy’ more difficult. Putin’s war is an inflection point for the region, and there is now new pressure for countries to pick a side, even if global powers like Russia or the United States deny it. The countries of the region must give thought to their own political and economic futures, and governments must ask themselves what type of future they want to contribute to. The last four months have challenged three decades of strategy for many countries in the region. Unfortunately, the coming weeks and months offer no easy guarantees.