Perspectives: Central Asian states walking fine line on Russian sanctions

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Kazakhstan and Kyrgyzstan are walking a geopolitical tightrope when it comes to international sanctions against Russia, striving to please both the Kremlin and the West. Kazakhstan seems to be managing the balancing act better than Kyrgyzstan.

In recent months, Kazakh and Kyrgyz leaders have engaged in rhetorical calisthenics aimed at remaining in the good graces of all parties involved in the war in Ukraine. During a late autumn visit to Germany, for example, Kazakh President Kassym-Jomart Tokayev repeated earlier denials that Kazakhstan has facilitated Russian parallel-import and sanctions-evasion schemes, insisting that Astana “has clearly stated that it will follow the sanctions regime.” At the same time, Tokayev said Kazakhstan was not “anti-Russia” and valued “comprehensive cooperation with Russia, with which [Kazakhstan] shares the longest border in the world.”

Similarly, Kyrgyz President Sadyr Japarov has denied USaccusations of sanctions-busting by his nation. “There is no ground to believe so,” he said in comments published by the Kabar state news agency. “Russia and China do not depend on small Kyrgyzstan.” 

Such official denials are undermined by mounting evidence of questionable trade practices. A potential indicator of sanctions-busting behavior is seen in the rapid growth of trade volume in 2022. Last year, Kazakhstan’s exports to Russia saw a 25 percent increase, whereas Kyrgyzstan’s exports increased by 150 percent over previous year totals.

Numerous cases of suspicious trade have been documented. In one prominent example, The Washington Post outlined a scheme that was broken up, in which a Kyrgyz entity tried to act as a conduit for shipping Chinese-made drones to Russia.

In another case, an investigation by Radio Azattyk illustrated how Kyrgyz and Kazakh companies are exporting microchips, telecommunications equipment and other electronic components to Russia. Such components are similar to those found in Russian weaponry used in Ukraine. Meanwhile, an OCCRP investigation also showed how drones and microchips allegedly used by the Russian military are making their way to Russia via Kazakh companies.

Even Kazakhstani officials have acknowledged that some dual-use items have made their way to Russia via Kazakhstan.

On a basic level, the challenge of keeping both the West and Russia happy for much longer seems difficult, if not impossible. Referring to Tokayev’s pledges that Kazakhstan is upholding the sanctions regime while remaining Russia’s faithful economic ally, Rakhimbek Abdrakhmanov, the director of the Kazakhstan School of Applied Policy, said the concepts are mutually exclusive. “These two promises cancel each other out; Kazakhstan cannot simultaneously enforce the sanctions regime and be on good terms with Russia,” Abdrakhmanov said.

Despite an abundance of evidence that both Kazakhstan and Kyrgyzstan are violating the Russia sanctions regime, only Kyrgyzstan has faced Western punishment. Five Kyrgyz companies have been sanctioned for aiding Russia’s war effort.

One explanation for the discrepancy is connected to image-crafting. Kazakhstan has adopted measures that look good, even if they do not function optimally. To better control the flow of sanctioned goods, for instance, Astana launched an automated online tracking system that ostensibly enables the monitoring of imported goods into Kazakhstan and their further movements. This has been presented as a solution to stopping the flow of sanctioned items.

Kazakh investigative journalists, however, have raised doubts about the system’s effectiveness. According to Dimash Alzhanov, a political analyst from Kazakhstan, the items used in Russia’s military industry are exported by companies able to bypass the tracking system.

Effective or not, Kazakh officials have still done noticeably more than their Kyrgyz counterparts to address Western complaints. Underscoring Bishkek’s sluggish response, the Kyrgyz security services chief, Kamchybek Tashiev, announced an investigation when Kyrgyz companies were sanctioned in July. Almost six months after that announcement, the investigation has yet to produce any findings.

Meanwhile, in a move that some Western observers deem an attempt to obscure monitoring efforts, Kyrgyzstan’s National Statistics Committee changed the format in June for open data reporting on foreign trade. Instead of breaking down exported items into specific categories using a 10-digit code, the agency started using first four-digit codes, each covering a much wider variety of goods. A representative of the agency, Gulsara Sulaimanova, explained the move, saying “the need [for 10-digit codes] was not that important to users.”

Iskander Sharsheev, a Kyrgyz economist, affirmed that the coding change has made monitoring trade more difficult: “Now that the data on imports and exports is not disclosed, we cannot tell if sanctioned products are transported to Russia via Kyrgyzstan.” 

Kazakhstan has additionally been much more adept than Kyrgyzstan in demonstrating a willingness to push back against Russian pressure, scoring diplomatic points with the West in the process, regional experts say. Such an advantage is understandable, some add, given that Tokayev made his way to the top of Kazakh politics via the country’s diplomatic service.

Some examples of Kazakhstan’s diplomatic dexterity include Tokayev’s statement in June that his country would not recognize the independence of the breakaway Ukrainian regions of Luhansk and Donetsk. In November, following a Kazakh-Russian meeting, Tokayev tweaked the Russian delegation led by Vladimir Putin by delivering opening remarks at a joint news conference in Kazakh.

“Kazakhstan has painted a beautiful image,” said Abdrakhmanov, explaining how Kazakhstan entities and individuals have managed to dodge sanctions so far. Alzhanov also noted that Astana maintains open channels of communication with western think-tanks, media and other inside-the-beltway types. 

Global economic factors also help Kazakhstan diminish Western ire concerning sanctions-busting. Kazakhstan’s oil and gas resources attract large investments; six out of the 10 largest investors in the sector are entities headquartered in the EU, UK, and US. Kyrgyzstan, meanwhile, lacks natural resources and is not a hub for intercontinental trade.

“We [Kyrgyzstan] are being made an example [of], because western businesses are not represented here. We are small,” said Sharsheev, the Kyrgyz economist. “The safest thing to do [for the West] is to push around our country because it cannot do anything in response.”

Source: Eurasia