Will the binding thread between Astana and Bishkek get torn?
Introduction
Are all the Eurasian Economic Union (EAEU) states equal, but some more equal than others? Do the current Astana-Bishkek tensions threaten the EAEU?
The complications
In September and October, tensions between Bishkek and Astana unraveled. In mid-September, President Nazarbayev claimed that Almaty’s GDP alone is five times that of Kyrgyzstan, reports Baurzhan Mukanov, of Informburo.kz. Also, Nazarbayev met Omurbeck Babanov, an Kyrgyz opposition presidential candidate, announcing that Kazakhstan will cooperate with any elected President of Kyrgyzstan, reports 24.kz, a website of the Khabar agency.
Bishkek claimed that the meeting was an interference with Kyrgyzstan’s domestic affairs. The Ministry of Foreign Affairs of the Kyrgyz Republic responded with a protest note, report Olga Dzyubenko, Raushan Nurshayeva, and Olzhas Auyezov, of Reuters. Later, President Atambayev of Kyrgyzstan criticized Nazarbayev’s old age and income inequality in Kazakhstan and accused Astana of having supported Kyrgyzstan’s repressive ex-President Kurmanbeck Bakiyev. In turn, Astana also issued a protest note, denied any interference, and banned dairy imports from Kyrgyzstan, reports Timur Toktonaliyev, of Institute for War and Peace Reporting. Kyrgyzstan responded by banning unrefined flour from Kazakhstan, reports Kazakh-Zerno, an agricultural information agency.
Though Babanov did not win, Atambayev continued attacking Kazakhstan. Shortly after the election, the lame duck Atambayev quoted George Orwell, comparing the EAEU to “Animal Farm”, “All animals are equal, but some animals are more equal than others,” and threatening to call its assembly, reports Sputnik. He claimed that large EAEU countries, like Kazakhstan, can get away with violating its principles. Later, Atambayev admitted having been “too emotional about Nazarbayev.” Yet he put more wood on the fire by claiming that the prohibitions isolate Kyrgyzstan from Russia, reports Bakyt Tolkanov, of the Sputnik information agency.
Bishkek also refused to accept 100 million U.S. dollars of aid from Kazakhstan, granted to assist Kyrgyzstan in its economic integration in the EAEU. Atambayev claimed that he had requested this assistance, in the form of equipment, in 2014, and they had to wait for 3 years for the aid to arrive, reports Sputnik.
The tensions persisted. In early November, in response to accusations on breaching the EAEU norms, Kazakhstan’s Prime Minister Bakhytzhan Sagintayev demanded measures against smuggling and improvements in tax administration and law enforcement in Kyrgyzstan, reports Novosti.kg. Kazakhstan also extended the ban on Kyrgyz imports to include confectionery and meat product imports, reports Tengri News.
The causes of tensions
Kazakhstan and Kyrgyzstan differ politically. Kazakhstan is allegedly transitioning from a presidential to a presidential-parliamentary republic; Kyrgyzstan is already a parliamentary republic, after two color revolutions. Kazakhstan’s President Nazarbayev has been in power since 1989; President Atambayev was elected in 2011. The opposition and many international organizations condemn Nazarbayev’s long stay in power. Atambayev, the first Central Asian President to step down from office voluntarily upon expiration of his terms, had nothing to lose from criticizing. In turn, Astana stressed the economic achievements of Kazakhstan, to countervail criticisms from Bishkek.
Since Kyrgyzstan depends on remittances, it needs close economic ties with Russia more than Kazakhstan does. Remittances (mostly from Russia and Kazakhstan) accounted for 30.4% of Kyrgyzstan’s GDP in 2016, compared with 0.2% in Kazakhstan, according to World Bank estimates. For the period from January 2016 to October 2017, the rouble appreciated 19%, while the tenge depreciated 4.7%, relative to the Kyrgyz som, according to the OANDA exchange rates, an online service of Olsen and Associates, a Zurich-based econometric research firm. Working in Russia became more beneficial for Kyrgyz guest workers than working in Kazakhstan. Thus, free movement of labor in the EAEU is much more beneficial for Kyrgyzstan than for Kazakhstan. This conflict of interest may explain why Kazakhstan delayed providing the aid to Kyrgyzstan.
Kazakhstan, being less dependent on economic ties with Russia than Kyrgyzstan, is acting more independently in political and military issues as well. For example, in summer, Kazakhstan hosted the “Steppe Eagle 2017” military drills. NATO military experts participated in these drills, reports Kazinform.
Astana is also switching the Kazakh alphabet to Latin letters, rather than the Cyrillic letters, used in the Russian language. Azerbaijan, Turkmenistan and Uzbekistan have already substituted Latin characters for Cyrillic characters. Yet Atambayev criticized Kazakhstan’s switch as a political move to distance itself from Russia. Kyrgyzstan will not switch, since Atambayev believes it is costly and distances its people from Turkic-language speaking ethnic groups in Russia, such as the Tartars and the Bashkirs, reports Sputnik.
Officially, Moscow recognizes the switch to Latin characters as a domestic issue of Kazakhstan. According to Grigoriy Karasin, Russia’s Deputy Minister of Foreign Affairs, Russia’s position on the issue is “calm,” reports Radio Azattyq. However, to avoid complications with its neighbor, Moscow may be sending warning signals to Astana through its allies.
The effects of prohibitions
Restricting trade between the two countries is inefficient. The loss to consumers from higher prices exceeds the gain to domestic producers from decreased supply and more monopoly power. The prohibition of unrefined flour is a restriction on raw materials imports that hurts Kyrgyz consumers, increasing bread prices. Since the controls are prohibitions, rather than tariffs, governments earn no revenues. The harm from prohibitions makes the tensions likely to cease under the next President of Kyrgyzstan.
The interests of Moscow
The Kremlin needs both countries in the EAEU. The withdrawal of Kazakhstan, whose President was an initiator of Eurasian integration, would be a signal for Belarus. The relations of Minsk with Moscow are uneasy, and the withdrawal of Kazakhstan would cause Belarus to consider terminating its membership as well, leading to the EAEU’s demise. Yet Astana itself is not interested in withdrawing, since it would indicate failure of a project that Nazarbayev himself had initiated. Without strong relations with Moscow, Kyrgyzstan may lose the benefit of free movement of labor and switch sides in the geopolitical struggle, to re-install the U.S. military base that existed in Bishkek’s airport under ex-President Bakiyev. The Kremlin will need settle the tensions somehow, if they continue under Zheenbekov. All countries in the EAEU are equal, but smaller member states cannot afford to neglect the Kremlin's interests.
Conclusion
Though with different regimes and economies, Kazakhstan and Kyrgyzstan are in the same boat. Moscow may interfere to help their leaders find a common language.
Notes
On October 15, Kyrgyzstan held its presidential election. Sooronbai Zheenbekov, candidate from the ruling Social Democratic Party, won, with 54.22% of votes. Babanov came second, with 33.49% of votes, reports Saltanat Abdrayeva, of the Kabar information agency.
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