Today we finish this Kazakh mini-series, with this piece by Foreign Affairs reporter Irina Alksnis. Irina’s piece is entitled “What Does the USA Want From Kazakhstan?”
We saw that Kazakh Prez Nazarbaev went to Washington DC to meet with Prez Trump; they discussed a wide range of political and economic issues, including trade and investment. The U.S. is particularly eager to get its hands on Kazakhstan’s oil and gas reserves. Plus, having a geo-political ally in that strategic location — wedged between Russia and China — would also be a keen bonus for the American Military-Industrial Complex.
Irina is a good and clear writer who needs no explication, hence with her piece I decided to resort to straight translation. Here is Irina doing the rest of the talking:
For those not in the loop, the very end of last year was marked with an Informational Bomb that went almost unnoticed in Russia, since our country was busy celebrating the onset of the New Year.
However, it had become known at the very end of December 2017, that just a couple of months prior to this (in October), $22 billion dollars of the National Sovereign Fund of Kazakhstan were blocked in the accounts of the Belgian filial of the American Bank of New York Mellon. These 22 billion comprise around 40% of the Sovereign Fund, and around 17% of the entire Gross Domestic Product of Kazakhstan.
In this story, everything is just perfect:
- The fact that the money was confiscated in the course of a lawsuit by Moldavian businessman Anatol Stati, who was involved in investments in the Kazakh oil-gas industry (his investments comprised $150 million dollars), as a result of which he got into a quarrel with the Kazakh government.
- The fact that Stati’s lawsuit named a maximum of $4 billion dollars, and the Stockholm Arbitrage Court ruled in 2013 that Kazakhstan owed a compensation to the businessman in the amount of half a billion dollars; and yet seized $22 billion.
- The fact that this is apparently not the only — although it is the largest — case of blocking Kazakhstan’s money, on the part of the West. It is said that simultaneously there was a whole series of smaller financial arrests.
This whole history and the recent official visit of Nazarbaev to the U.S. provide so many clues for thought, analysis and speculation, that one doesn’t even know where to begin.
No doubt it would curious to discuss why this action — the blocking of sovereign funds, for example, which are backed by the American Treasury — was not also employed against Russia in recent years. Given that, in the peak of the confrontation, the West has threatened us with all possible punishments.
After all, this would seem to be an extremely effective instrument of pressure — and yet, the Russian sovereign funds (in Western banks) have not been touched. At least, not yet.
At the same time, it is difficult to refrain from sarcastic commentaries regarding [that old political joke] about sitting on two (or, in this case, even three) chairs simultaneously, a policy which the Kazakh government has followed, attempting to navigate between Russia, China, and the West.
If [Kazakh government] homages to China are met in Russia with understanding, given the current state of Russo-Chinese relations and geo-political realities, the games they [Kazakh government] are playing with the West, especially with the U.S., and even with NATO, are, to put it mildly, upsetting (to Russia).
And then the freezing of the sovereign accounts showed, once again, just how much the other side [=the West] values, and what price they assign to, any demonstrations of piety and eagerness to please them.
However, the main question in all this remains the same: What does all this mean?
What do the United States (and there can be no doubt that they are the ones behind this arrest of Kazakh money) hope to achieve by taking this step? And was Nazarbaev successful in turning the situation around for Kazakhstan, during his recent trip to the U.S.?
These questions are all the more interesting (especially for Moscow and Beijing), considering that Kazakhstan truly is a key player in the region, and has been dragged into highly important processes — ranging from the building of a new configuration of Eurasian collaboration, to regulation of the Syrian conflict.
Such an aggressive and demonstratively blunt action on the part of the West towards Kazakhstan leads one to posit the most unpleasant variants as to what they might demand from Astana, in order to resolve the problem [which they themselves] created.
The situation is compounded by the fact that Kazakhstan, being perhaps the most successful of the young post-Soviet states, also carries within itself the entire anti-Russian complex which is innate to all the national republics of the USSR.
And here it is important to stress, that this complex, at its base, is not at all some irrational Russophobia, but consists of absolutely pragmatic concerns. (We are excluding here the clinical cases of Baltic and Ukrainian Russophobia.)
Russia is too big, too strong, too wealthy, too influential (politically and culturally) as a civilization. Historically it possesses the capability to pull into the orbit of its influence (and into its own composition) huge territories which neighbor it.
Given this situation, it is an absolutely rational strategy, chosen by neighboring countries and their elites, to distance themselves from Russia. In this regard, Kazakhstan is distinguished by two main factors.
First of all, the current government of the Republic is characterized by a high level of pragmatism. Balancing between active cooperation with Russia along a wide spectrum of issues, along with certain steps which could be called anti-Russian or even Russophobic, it tries not to bend the stick too much in the second direction.
Secondly, Kazakhstan’s situation is complicated by the fact that it is squeezed in between two great civilizational states, whose gravitational pull could rip the country apart. For Kazakhs, the Chinese influence is not one whit better than the Russian.
In this situation, the stubborn attempts of Astana to play along with the West also appears to be a completely pragmatic step, taken in the hopes of balancing the dangerous — in the opinion of the Kazakhstan elites — pressure of Russia and China coming at them from two sides.
In general, hence, it is possible to discuss, at length and in detail, that Astana’s geo-politics are completely rational, thought-through, weighed, and fruitful — from the point of view of the Kazakhstan government and its attempts at self-preservation.
However, the story of the confiscated money from the sovereign fund has shown, that all the above factors no longer have any meaning.
World politics has entered a phase where any attempts on the part of small and not very influential (in the world table of ranks) governments to keep a balance, to preserve their neutrality, to continue successfully to sit on two or three chairs; or, like the over-affectionate calf, to suck the teats of several cows — are doomed to failure. And nobody cares that none of the available choices suits them (“Both are Worse”) .
The confiscation by the West of $22 billion dollars has become, for Astana, not even a wake-up call, but a full-on fire alarm, signalling that the time for choosing has already run out.