New energy partner in Asia?: Kazakhstan is an attractive paradise for raw materials

New energy partner in Asia?
Kazakhstan is an attractive commodity paradise

By Mary Abdelaziz-Ditzow
10/13/2022 3:27 p.m

Kazakhstan is rich in oil, gold and silver, rare earths and untapped gas deposits. Since the start of the Ukraine war, the Central Asian country has also distanced itself from Russia. A good time to expand German-Kazakh economic relations?

In the Kazakh capital of Astana, Kremlin chief Vladimir Putin and Turkish President Recep Tayyip Erdogan discussed the Ukraine war. Kazakhstan itself has a clear stance on this: the self-proclaimed People’s Republics of Donetsk and Luhansk are not recognised. When the UN General Assembly voted on the legality of Russian annexations in Ukraine last night, the former Soviet republic was not among Moscow’s four backers. And while the country is clearly distancing itself from Russia, it is also looking for stronger economic cooperation with the West.

For the energy expert Oliver Rolofs and Kazakhstan expert Christoph Mohr, this would be a good time for Germany to further expand bilateral economic relations with the Central Asian state. Eight percent of the crude oil in the European Union already comes from there. “Kazakhstan also has immense gas reserves – more than two trillion cubic meters lying dormant in the earth,” explains Rolofs in the ntv podcast “Wirtschaft Welt & Weit”.

He sees real opportunities for Germany, for example, in the expansion of the pipeline infrastructure, because Russian oil is currently flowing to Europe via Russian territory or is transported by ship across the Caspian Sea, which is a laborious process. Alternative supply routes could be created with new pipelines.

The energy expert also sees potential in rare earths. With these raw materials you can “jointly advance the energy and mobility transition wonderfully,” he says. He also considers Kazakhstan to be a “very interesting partner” when it comes to issues such as hydrogen production.

Realpolitik balancing act

Kazakhstan expert Mohr from the Friedrich Ebert Foundation also sees great potential for deepening German-Kazakh relations. Kazakhstan is still closely linked to Russia, he explains. However, the country is currently trying to move away from the Russian zone of influence – among other things to avoid secondary sanctions. A real political balancing act for Kazakh President Kassym-Jomart Tokayev – to the delight of the West and to the annoyance of Putin, says Mohr. In Russia it has already been discussed whether, after Ukraine, Kazakhstan should also be “denazified”.

However, how realistic a stronger expansion of economic relations between Germany and Kazakhstan is depends on whether President Tokayev keeps his promises of reform. In January, violent protests broke out in Kazakhstan, killing over 200 people. The bloody riots were triggered by rising gas prices. In order to get a grip on them, Tokayev asked the CSTO for help. The military alliance sent 2,500 so-called “peacekeepers” to Kazakhstan – foreign soldiers who brutally cracked down on the protests. Most of them came from Russia.

As a result, Tokayev announced democratic reforms. The rule of law should be strengthened and parliament given more influence, he promised. His vision is a “new Kazakhstan”. For Kazakhstan expert Mohr, this can only be the starting point of a process for which comprehensive economic cooperation seems necessary. Because after the admission of 100,000 Russian mobilization refugees, he expects an intensification of internal political conflicts in Kazakhstan, which will primarily erupt in the labor and housing markets.