People in Kazakhstan created a petition to withdraw from the EAEU and CSTO. What can be the consequences of this political demarche for the republic?
Kazakhstan is actively discussing the initiative of Kazakhstan to withdraw from the Eurasian Economic Union and the Collective Security Treaty Organisation. The petition published on the independent portal, ALASH online, has already gathered over 69 thousand signatures. 92 per cent or 63.7 thousand Kazakhstanis support the author’s idea. This number is negligible for Kazakhstan with population 19.8 million people. Nevertheless, the petition caused a new wave of discussion about the value of EAEU for Kazakhstan and consequences of the republic’s withdrawal from the union in the media.
Almost anonymous letter
The key argument in favour of withdrawal from organisations named by the petition author, some Shyngys Akhmetov, is the risk of economic isolation of Kazakhstan from the rest of the world. Moreover, the text of the petition implies that the demarche was caused not by grievances against the Union itself, but mainly by relationships with Russia.
“We demand that the authorities of Kazakhstan withdraw from the CSTO and EAEU, and also stop all integration processes with the Russian Federation. Keep away from diplomatic and economic relationships with Russia, even despite the subsequent breach. We also have high vehicle customs clearance fees because of the EAEU interests, namely, the so-called initial registration and illegal recycling fee,” writes Shyngys Akhmetov in the letter.
It is important to note that the author’s name and surname do not mean anything. The person who wrote the petition is not a public person or activist, deputy or public servant, blogger or journalist. He has not declared his position on the media or social media. The editorial office of CABAR.asia tried to contact Shyngys at his e-mail, but did not receive any answer.
Nikita Mendkovich, head of the Eurasian Economic Club, believes that dubious online petitions should not be focused on. Moreover, there are different ways to inflate the count of subscribers via fake accounts on social media. It is just an attempt to spread the anti-Russian hysteria.
“Let’s take a look at explicit actions of real people. In 2022, despite sanction risks, over 40 thousand Kazakhstanis acquired citizenship of the Russian Federation. In the last three years, nearly 140 thousand Kazakhstanis have immigrated to Russia. Nearly 600 thousand live in Russia to acquire citizenship under the simplified regime available in the EAEU. I think this is a more reliable indicator of public attitude in Kazakhstan to the integration with Russia in the framework of EAEU and CSTO,” the political analyst said.
Pros and cons of EAEU for Kazakhstan
The topic of Kazakhstan’s withdrawal from the Eurasian Economic Union has arisen in the Kazakhstan-based media for many times. In seven years of EAEU’s existence, Kazakhstan-based economists have reminded many times that the union is unfavourable to the republic in terms of economy. The initial idea of increasing markets by exporting to the EAEU has actually failed in the last seven years. However, it should be mentioned here that we mean trade relations with Russia, not with other countries of the union. Kazakhstan remains the buyer in the first place, and seller, to a lesser extent.
These reasons are substantiated by statistical data on mutual trade between Kazakhstan and Russia. Thus, if we compare indicators of 2014 (before EAEU) and 2022, we can see that the share of Russian imports in the trade turnover has changed insignificantly – from 68 per cent to 66 per cent. The percentage of Kazakhstan imports was around 32 per cent and grew only by 2 per cent.
Kazakhstan-based economist Arman Beisembaev has the opinion that Kazakhstan is the only country in the EAEU that does not benefit from the union.
“Of course, there are people who are dissatisfied (with the membership of Kazakhstan in the EAEU – editor’s note). I am not saying that the EAEU is extremely beneficial for us. We have a large trade imbalance with Russia – about 10 to 1. A huge amount of imports comes from our northern neighbour. The structural similarity of our economies nullifies all benefits of Kazakhstan in the union,” Beisembaev said.
Among other arguments for withdrawal from the EAEU, public activists name Russia’s application of non-tariff barriers to foreign economic activity. Russia violates general principles of the union “all union members are equal and members of the free trade zone” from time to time. A good example is the ban on sugar export from Russia last summer. For Kazakhstan, which has a weak sugar industry, this decision caused deficit in high season, rise in inflation of groups of commodities, and social tensions. Olzhas Zhoraev, member of the Association for Public Policy Analysis and Management (Washington), said to Ulys Media that in the last ten years, Russia has applied over 320 non-tariff measures to all the countries, including Kazakhstan, and less than 100 measures to Kazakhstan.
“Looking at this data, people think that we do not need the Eurasian Union, that Kazakhstan bears only losses from membership in the EAEU. But this is a superficial view, only the first layer. If you look deeper, you will see that our economic situation would be worse without the Eurasian Union. Kazakhstan is strongly and seriously dependent on Russia. Our relationships have undergone some reforms since the EAEU, but we still depend on Russia,” said Arman Beisembaev. The speaker considers such high level of import dependency on one country a drawback.
Based on the last year’s trade statistical data, Russia is on the top of the list of largest importers to Kazakhstan. Its share is 34.7 per cent. Russian imports amount to 17.3 billion dollars out of 50 billion dollar total imported goods. China with 21.9 per cent is on the second place. Imports from Europe amount to as little as 16.9 per cent.
Nikita Mendkovich cites data of recent marketing studies: 30-50 per cent of food products in Kazakhstan stores come from Russia. These goods would cost much more if it was not for the Eurasian free trade.
“Withdrawal from the EAEU is the rejection of one third or even a half of every plate’s content, to put it simply. And this statement is true for many commodity groups from consumer products to Russian armament, which, according to the recent statement of deputy minister of Kazakhstan Marat Khusainov, is more effective and cheaper than that of NATO,” said the expert of the Eurasian Economic Club.
As to exports from Kazakhstan, Russia has the share of 10.4 per cent in it. The main buyers of Kazakhstan raw materials are European countries. Their proportion in the value of exports from Kazakhstan exceeds 41.5 per cent.
Leave or stay
Economist Arman Beisembaev depicts the image of the future, where Kazakhstan declares its withdrawal from the Eurasian Union. Consequences of this political demarche could strongly affect the national economy. A new wave of severe economic crisis will begin.
“Moscow will immediately close its market to us. Companies might be ordered to stop cooperating with Kazakhstan. Can you imagine what would happen? Orders and contracts would fail. Companies, which were engaged in export-import transactions with Russia, would go bankrupt. The flow of goods from Russia and via Russia will return to zero at first. It means that shelves in our stores will become empty as nothing could replace Russian imports. The same is true about household appliances, detergents, some food products, equipment, machine tools, technological products,” the financial analyst said.
Import replacement options will surely be found over time. Another question is the price of such goods, including customs fees, in Kazakhstan. It all, according to the expert, will lead to raging inflation and a spike in unemployment. The spheres, which ordinary Kazakhstanians have never thought about, would have problems: petroleum products, gas, electricity. Kazakhstan, which is a landlocked country, delivers most of its export goods via the territories of neighbouring countries, including Russia. In case of termination of economic relations, this transit will be a great trouble. We should not ignore the fact that the republic buys gas and electricity from Russia to cover its own shortages. Therefore, we should not forget about the ‘switch’ thing.
“The recalibration and reformatting of relationships between Moscow and Astana would take a lot of time – five or ten years. Those who filed the petition are not aware of the scope of consequences and the difficult situation of Kazakhstan. Any closure of borders along our country would kill us in terms of economy. It would be a 90 per cent decline in our living standards, absolute impoverishment. We live in the world, where everyone offends anyone, and our country is at the intersection of political interests of several powers. Kazakhstan tries to maintain a delicate balance of friendly relationships with all countries, without any biases towards any party,” Beisembaev said.
The experts name other benefits of cooperation between Kazakhstan and EAEU. Nikita Mendkovich reminded that on top of that, Russia is the key channel of imports of high living standards, social welfare, education. It is more profitable for Kazakhstan to receive such intellectual investments without immigrating to Russia, but creating them in their own land with the help of Russian technologies and business practices. Arman Beisembaev added financial investments to this list. And they are a very powerful factor.
“Until 2014, Ukraine was the largest user of investments from Russia. After the Euromaian, when Russian oligarchs benefitting from Ukraine-based assets, were deprived of their assets, Russia started the war in Donbas. When it did not lead to anything in eight years, and losses of Russian investments in Ukraine continued, February 24 happened. The war in Ukraine has deep economic roots. If we do the same thing (get out of Russia’s control – author’s note), will we have a different situation?” the economist said.
According to Beisembaev, Kazakhstan’s withdrawal from the EAEU is not just a one step, it will cause a chain of actions. Namely, withdrawal from CSTO, and further political consequences. Once the republic withdraws from CSTO, it would not be under protection of Russia and all guarantees would stop working.
Official position
Official position of authorities in this regard has never been categorical or negligent. Last year president of Kazakhstan Kasym-Zhomart Tokayev to the direct question of the Russian television channel about the withdrawal from the EAEU said that all talks about Kazakhstan’s allegedly cooling relationships and planning to withdraw from the Eurasian Economic Union and CSTO were not true.
“As to the EAEU, it is a very important organisation. At the meeting of the economic forum in Bishkek, I said about integration, that it was a difficult job requiring mutual compromise. Every country finds it essential to defend its position. […] Our representatives in the EAEU defend strongly or at least explain our interests to colleagues. Controversies happen, but why dramatize them? It’s normal within an international organisation. I believe we reach necessary and useful decisions, after all, which are in the interests of our states,” the president said.
Given the fact that the petition for the withdrawal from EAEU and CSTO appeared after the direct statement of the president, it is still a long way off from the withdrawal of public objections regarding this question.