On April 19, 2022, the Representative Office of the Institute for War and Peace Reporting in Central Asia (IWPR CA) organized an expert meeting to discuss the military events in Ukraine and their impact on the countries of Central Asia. During the discussion, such aspects as the economic consequences of sanctions, energy security, geopolitical changes in the region, as well as issues of regional security were touched upon.
IWPR Regional Director for Central Asia Abakhon Sultonazarov opened the event by noting that Ukraine is experiencing its 55th day of hostilities. The consequences of the war are noticeable on the territory of the Eurasian space in the sphere of economy, social status, international politics. The purpose of the conference is the opportunity to discuss them in the long term with assessments within the framework of the reports of four speakers. The event was moderated by Jos Boonstra, an analyst and researcher at the Center for European Security Studies.
The conference was attended by more than 80 participants from the CIS countries, Europe, and the USA. At the end of the speeches, the participants actively asked questions and discussed.
Professor of International and Eurasian Security, Combating Terrorism and Human Rights, Democracy Maria Omelicheva spoke about the impact of Western sanctions on Central Asia and revealed likely scenarios for the development of the economy in the region. According to statistics, Kyrgyzstan and Kazakhstan are experiencing special and “unique” difficulties due to close cooperation with the countries of the Eurasian Economic Union. Thus, prices for food products increased by an average of 15.4%, for goods and services – by 12%, non-food – by 10.9%, and paid services increased by 8.3%. The professor also notes that all countries were affected by food supply problems. In addition, migrants from Kyrgyzstan, Tajikistan and Uzbekistan are working in Russia, whose funds are currently frozen during the transfer to their homeland. In addition, Kyrgyzstan is a recipient of a large number of Russian investments, and Kazakhstan has more than 8,000 different Russian enterprises in the country.
To counter these challenges, the countries of Central Asia will need to shift away from economic dependence in labor migration and the export of natural resources and raw materials to the Russian Federation. This is possible due to the transition to multilateral cooperation in the areas of management in infrastructure, transport, border control, and so on. As Omelicheva points out, it is likely that Kazakhstan and/or Uzbekistan will be able to lead regional cooperation efforts due to their level of economic development in the region. At the moment, the main obstacles to strengthening regional cooperation are the lack of resources, a common vision, and a certain level of mistrust between countries.
Then the floor was given to Lilian Posner, a researcher in the field of Russian and Eastern European affairs. The expert touched upon the problem of labor migration and ethnic oppression after the events in Ukraine. So, for example, migrants were the first to lose their jobs when sanctions were imposed and staff cuts. In addition, many of the residents of Kyrgyzstan, Tajikistan and Uzbekistan are domestically dependent on remittances from workers in Russia. In other words, an uncertain situation is observed both in their native countries and in Russia itself.
Based on this, two counter questions arise: “Should migrants stay in Russia in an attempt to continue earning? Or will returning home be more promising? Posner cites unofficial statistics that about 40% of workers from Tajikistan planned to return within the first two weeks after the conflict. However, the situation changed radically a month later, as the shock reaction of the due to the war in Ukraine has relatively weakened and stabilized. In addition, returning back can be financially costly for migrants due to logistical problems with air travel and higher travel costs.
Nevertheless, Posner refers that despite the complicated situation and sanctions, the opportunities for earning money in Russia remain open and relevant, so many migrants are considering further arrival. At the same time, the social situation of the workers deteriorated significantly. Due to increased exploitation and financial fraud, rumors and fears of migrants being forcibly sent to the fighting front, deportations from the country are becoming more common. In the future, opportunities for day-to-day job can only get worse with increasing cases of ethnic pressure and harassment in Russia.
Roman Vakulchuk, Director of the Center for Energy Studies at the Norwegian Institute of International Affairs (NUPI), in his presentation touched upon the issues of geopolitical uncertainty and energy security in Central Asia. The report presented potential risks, their solutions, as well as new energy opportunities in the region in light of the war in Ukraine. One of the main risks is the high dependence of the countries of the region on energy transit through Russia. For example, Kazakhstan exported more than 90% of its crude oil (68 million barrels) through Russia in 2021. Of these, about 78% is accounted for by the Caspian Pipeline Consortium. A large share of crude oil exports from Kazakhstan goes to the countries of the European Union. Kazakhstan covers 10% of the total oil demand in the European market.
The expert also identified a number of other risks for the region. In particular, despite high oil prices, the countries of Central Asia may suffer significant financial losses in the event of a decrease in energy exports. In the event of a possible supply cut, losses for oil companies are estimated at 1.5 billion USD per month. In addition, transporting oil is becoming more difficult due to logistical risks in the Black Sea, rising insurance prices, and an underdeveloped infrastructure for energy exports from the region. It was also noted that it would be difficult for the countries of Central Asia to redirect exports to the Asian direction in a short time. This is due to limited oil pipeline infrastructure, as well as an ongoing dispute between China and Kazakhstan over the suspension of 1,300 containers by railway from Kazakhstan at the border with China.
As for the latest trends in energy sector in Central Asia, the consumption of carbon raw materials remains at the same level. And that goes against the goals of carbon neutrality. The countries of Central Asia will only increase domestic consumption and export of oil, gas, and coal in the coming years. For example, in Kazakhstan, only 2.5% of electricity comes from green energy, while 70% is still produced by burning coal.
Speaking about potential opportunities, Vakulchuk noted that Central Asian countries should build longer-term plans and not rely on carbon exports. The transition to renewable energy brings great opportunities for the development of the region. First, the countries of Central Asia have great potential for solar and wind energy. Secondly, the development of green energy can partially solve the problem of unemployment, since the development of clean energy requires more labor than, for example, the oil and gas industry. Thirdly, the region has significant reserves of critical materials needed to create solar panels, batteries, and wind turbines. For example, the region accounts for 38.6% of the reserves of manganese ore, 30% of chromium, 20% of lead, 12.6% of zinc and 8.7% of titanium. China is the main player in this market in the region. For example, China increased imports of molybdenum from Kazakhstan by 444%, zinc by 103%, lead by 94% between 2017 and 2020.
At the end of his speech, the expert noted that the war in Ukraine leads to growing uncertainty in the energy market around the world. If hostilities are prolonged, then the risks will increase. Therefore, there is an urgent need for the countries of Central Asia to diversify their economies and sources of income, develop infrastructure in the energy sector, and establish cooperation with new partners.
The last speaker is Pal Dunay, researcher, and professor of international security at the George C. Marshall European Center. As the expert notes: “If we recognize the relative distribution of forces in the international system, then Russia has probably strengthened its position in the post-Soviet space.” Dunay gave at least 4 reasons why Russia was able to maintain and increase its influence before the events of February 24, 2022, that is, before the Federation’s invasion of Ukraine.
First, Belarus weakened after the elections, where Lukashenka more clearly confirmed his political dependence on the Kremlin. The elections were held on August 9, 2020, where the president scored about 80% against opposition leader Svetlana Tikhanovskaya. Also, the strengthening of positions is noticeable in Russia’s participation in the ceasefire in the South Caucasus. The cessation of hostilities agreement signed by Armenia, Azerbaijan and Russia brought the armed phase of the Nagorno-Karabakh conflict to a halt after 45 days of fighting and thousands of military and civilian deaths on both sides. Armenia thus became completely dependent on the Russian position in the conflict. As a result of these developments, Nikol Pashinyan, the current president of Armenia, is weakening in the political race, which further strengthens the position of the Kremlin in the region.
The third reason for the rooting of Russian power is the growing strength of the Collective Security Treaty Organization (CSTO) on the territory of the post-Soviet countries. For example, this is noticeable in the recent crisis in Afghanistan, complicated by the rise to power of the radical Taliban group. This led to securitization policies in Central Asia. Russia contributed to various military exercises in Kyrgyzstan, Tajikistan, and Uzbekistan. In addition, the CSTO has increased its influence by resolving the internal conflicts of the treaty countries. For example, the organization influenced the January 2022 events in Kazakhstan, where President Tokayev legitimized its intervention. As the expert notes, here the president of Kazakhstan extremely successfully deployed explanations for the actions of terrorist troops, while not naming any country guilty of the conflict. Armenia, although it was the head of the operation, did not want to take part, but agreed to “play along”.
Dunay is inclined to believe that Central Asia is an appendage of Russia than any other player. For example, this is noticeable in the information war. Countries predominantly take advantage of pro-Russian news about the conflict. Georgia is one of the few countries that relies on independent news sources. Also interesting is the position of Uzbekistan with its official references to the UN.
As researcher Pal Dunay notes, “The war in Ukraine is a tragedy that was caused by the irrational behavior of a single person. It is still difficult to predict the outcome. Russia’s military strategy periodically shows signs of genocide.” The Central Asian countries are left to maneuver based on the political, economic, and social position of the Kremlin, trying to bring more signs of independence, to deal with risks in the long term.
You can watch the full version of the expert meeting: