2012-10-29 by Richard Weitz
Kazakhstan and Uzbekistan are the two most influential of the “stans,” having the largest land mass and population in Central Asia.
Uzbekistan is also Kazakhstan’s major trading partner within Central Asia.
Yet, the two countries, along with their presidents, are commonly seen as perennial competitors for regional primacy. Uzbekistan has the largest population (some 30 million compared with Kazakhstan’s 16 million), but Kazakhstan has the richest natural resources (especially oil) and most successful economy (measured in terms of comparative growth rates and levels of foreign investment).
In September 2012, in his first official bilateral visit to Kazakhstan since April 2008, President Islam Karimov and other senior Uzbekistani officials sought to dispel this image of perennial rivalry. They discussed a range of important bilateral, regional, and international issues with their Kazakhstani counterparts in Astana. These topics included boosting two-way economic ties, discouraging other Central Asian countries from taking actions that threatened their water supplies, and discussing how to manage the ongoing civil war in Afghanistan.
Mutual concerns regarding Afghanistan are clearly driving the two countries together.
Karimov cited the ongoing withdrawal of NATO forces from Afghanistan and other regional challenges as requiring that Tashkent and Astana to formulate joint policies aimed at “preserving and strengthening stability and general well-being in our region.”
Karimov and Nazarbayev accordingly pledged to coordinate their activities in regional and international organizations in areas of mutual interest. These include the Commonwealth of Independent States (CIS), the Shanghai Cooperation Organization (SCO), and the United Nations. With respect to the SCO, the presidents agreed to work to expand the SCO’s capacities to effectively meet the contemporary challenges and threats.
The two presidents expressed grave concern about the situation in Afghanistan and their support for resolving the conflict as soon as possible .They reaffirmed their commitment to contribute to the socio-economic reconstruction of Afghanistan. Uzbekistan has more interests at stake in the Afghanistan conflict than Kazakhstan. Not only do they share a common border as direct neighbors, but many ethnic Uzbeks reside in Afghanistan. Even so, Kazakhstan has been assuming a leading role in offering young Afghans scholarships to study in Kazakhstan. Uzbekistan has helped construct Afghanistan’s infrastructure, including its Internet and incipient railway network.
The interests of Kazakhstan and Uzbekistan seem to overlap most on national security issues, especially countering threats from Muslim extremists in Afghanistan and elsewhere.
On April 23, 2008, Nazarbayev affirmed the commitment of both countries to “combine efforts in the fight against extremism and drug trafficking from Afghanistan.”
The two countries’ economic ties are also strengthening.
Kazakhstan has become Uzbekistan’s major trading partner in Central Asia. Economic ties between the two countries are currently on the rebound. In 2011 bilateral trade exceeded 2.7 billion US dollars, a 47 percent increase over the same figures for 2010. During the first six months of 2012, bilateral trade reached $1.4 billion, an 18% increase over the first half of 2011. More than one half of Uzbekistan’s trade turnover with Central Asian countries is with Kazakhstan. They aim to double their trade within the next few years.
Furthermore, Kazakhstani and Uzbekistani investors have established hundreds of joint business ventures. According to Kazakhstani sources, more than seven hundred small and medium scale enterprises operate in Kazakhstan with some Uzbek investment. These joint ventures operate in such commercial sectors as food, pharmaceutics, construction, chemicals, and manufacturing. In Uzbekistan, Kazakhstani capital is concentrated in the cotton fiber, construction, and chemical industries.
The two countries are engaged in various multinational projects that would increase the flow of gas from and through their territories to Russia, China, and other countries.
Kazakhstani firms already use Uzbekistan’s territory as a transshipment route for some non-energy exports. Kazakhstani and Uzbekistani officials have coordinated their energy polices to induce Russian firms to pay more for their oil and gas exports, which Russian middleman often resell to European consumers with a hefty markup.
Since both countries became independent in 1991, their governments have signed more than one hundred bilateral agreements. The most important of these documents include the Program of the Economic Cooperation between Kazakhstan and Uzbekistan for 2006-2010 and the Strategy of the Economic Cooperation between Kazakhstan and Uzbekistan for 2007-2016. Nevertheless, many of their bilateral agreements have not been fully implemented. Nazarbayev said at their September 2012 summit that the two governments should review these existing documents with the aim of consolidating them by discarding those that are outdated or of little value while adding new ones to address new issues.
During Nazarbayev’s March 2006 visit to Tashkent, Nazarbayev also underscored the importance that improving Kazakh-Uzbek relations would have for his ambitions to increase wider regional political and economic cooperation: “The geopolitical situation in our region and the future of integration processes among our neighbors depends on Kazakh-Uzbek relations.”
When Karimov conducted an official visit to Astana in April 2008, the two leaders agreed to authorize their government to prepare a draft agreement on a bilateral free trade zone, which Karimov said would “increase volume of mutual trade significantly” by unifying customs duties and other trade practices of both countries. A working group headed by the prime ministers of both countries was created to establish the terms of the bilateral free trade zone and how it would integrate with the region’s other multinational economic frameworks. Kazakhstani and Uzbekistani officials have noted how their two countries’ transportation and communications infrastructure is mutually supporting.
Nonetheless, the similar economic profile of both countries, along with their excessive customs duties and border controls, unduly constrain their bilateral commerce.
Kazakhstan and Uzbekistan are competing to become the preeminent transit country for pan-Eurasian commercial and transportation networks (including a possible Europe-Asian highway).
Another earlier source of tension that has faded over time is that some Uzbek nationalists have asserted claims to territories in southern Kazakhstan that once belonged to medieval Uzbek Khanates. In 2000, Uzbekistani border guards unilaterally moved border markers deep into Kazakhstan’s territory. Kazakhstan’s contentious and difficult border demarcations with Uzbekistan were finalized only in August 2002. Even so, in September 2003, the Kazakhstani Foreign Ministry issued a statement claiming that its border service had detected 1,127 border violations “by the Uzbek side” since the previous November. Another complication is the large number of illegal immigrants from Uzbekistan that work in Kazakhstan, especially at urban construction sites and in the cotton fields of southern Kazakhstan.
Kazakhstani leaders see establishing good ties with neighboring Uzbekistan as essential for advancing their regional integration agenda. In March 2006, Nazarbayev observed, “The geopolitical situation in our region and the future of integration processes among our neighbors depends on Kazakh-Uzbek relations.”
Yet, Karimov has dismissed the Kazakhstani concept of a Central Asian Union as premature.
Karimov’s pessimism regarding Nazarbayev Union of Central Asian States may reflect the difficulties the two countries experienced after they agreed to establish a bilateral customs union in 1994. Karimov recalled during his April 2008 trip to Astana that problems with this structure led the two governments to join additional regional economic structures (e.g., the Central Asian Cooperation Organization and the Eurasian Economic Community), which also proved largely ineffective. We’ve been through it already,” he remarked to journalists.