Kazakhstan's attitude towards integration with Russia: less love, more fear. OSW Commentary No. 137, 29.05.2014

Russia’s annexation of Crimea and destabilization of Ukraine have created a new context for Kazakhstan’s foreign and domestic policy. The ongoing crisis in the relations with Russia and the West has also changed the current order in the entire post-Soviet area. From Astana’s perspective, the Kremlin’s policy towards Ukraine can be considered dangerous since it shows Russia’s determination to interfere with the domestic affairs of its neighbours in the pursuit of its own interests. Furthermore, this policy reveals and raises the price a country needs to pay for its potential attempts to break free from the Russian zone of influence. At present the biggest challenge for the authorities in Astana is the accelerated implementation of the idea of the Eurasian Union promoted by Moscow, which is to be another stage in the integration of post-Soviet states (presently Russia, Kazakhstan and Belarus). The signing of the Eurasian Union’s founding documents planned for late May 2014 and the launch of this organisation (scheduled for January 2015) is sure to bring Kazakhstan closer to Russia and simultaneously limit its economic and political independence. Nevertheless, Astana’s position in relations with Moscow will to a large extent depend on the new shape of the relations between Russia and China. China is pursuing its own strategic interests in Central Asia (including in the energy sector) and its main partner in the region is Kazakhstan. At the domestic level, Russia’s actions in Ukraine made the authorities in Astana fear that measures similar to those used in Ukraine could be applied towards Kazakhstan. On the one hand this has led to increased efforts aimed at consolidating the state and strengthening its structures, and on the other hand it has brought about a revision of those aspects of domestic policy which Russia could interpret as a pretext for interfering.

Azerbaijan-a growing problem for the West. OSW Commentary No. 146, 15.09.2014

Azerbaijan’s cooperation with the West, launched two decades ago, has helped it become a relatively strong and ambitious actor on the international stage. It has become a key country in the region from the Western (USA and the EU) and Turkish points of view, as well as an important partner in the energy sector. The strategic EU concept of the Southern Gas Corridor, also supported by the United States, is among the initiatives based on cooperation with Azerbaijan. Surprisingly, however, Azerbaijan’s increased ambition and importance have caused its policy to diverge ever farther from the expectations and plans formulated by the West. The changes in the balance of power in the South Caucasus, occurring in the context of the conflict in Ukraine, have forced Azerbaijan to revise its assessment of its position in the region. The main impetus for Azerbaijan’s actions is fear of Russia, as well as the weakness of the West which has become particularly apparent in the recent stages of the Ukrainian crisis. Azerbaijan’s actions so far have displayed its tendency to deepen its self-isolation in foreign affairs and consolidate its authoritarian system. This comes as a challenge to the West, whose ability to shape its relations with Azerbaijan has weakened considerably. This state of affairs poses the threat that in the current situation, the Southern Gas Corridor concept, which Azerbaijan amended in 2012 in its own favour, might become totally blocked.

Between energy security and energy market integration. Guidelines for the future development of the EU’s external energy policy in Europe’s neighbourhood. OSW Report, June 2011

For many years the European Union has been improving the efficient use of energy resources and yet the demand for energy in the EU continues to increase. When Europe belonged to one of the world’s key energy markets with relatively easy access to energy resources, growing energy needs were not seen as a source of concern. Today, however, as the competition for energy resources is intensifying and the global position of the EU energy market is being challenged by growing economies in the developing countries, above all China and India, the EU needs to adopt bold policies to guarantee the sustainable supply of energy. This report argues the EU needs to develop a fully-fledged external energy policy; i.e. a common, coherent, strategic approach that build bridges between the interests and needs of the EU integrated energy market on the one hand and supplier countries on the other. The EU’s external energy policy has two main objectives. The first one is to ensure a sustainable, stable and cost-effective energy supply. The second is to promote energy market integration and regulatory convergence with neighbouring countries (often but not always this supports the achievement of the first objective). However, in order to improve its effectiveness, the EU’s external energy policy needs to be seen in a broader economic and political context. Any progress in energy cooperation with third countries is contingent upon the EU’s general stance and offer to those countries.

China vs. Central Asia. The achievements of the past two decades. OSW Study 45/2013

The collapse of the USSR brought about conditions conducive to the dynamic development of relations between Central Asia and China. These relations have evolved from deep mistrust to the continually growing Chinese presence primarily in the region’s economy but also increasingly in its politics. Central Asia is playing a growing role in those areas of the economy which China sees as strategic (in particular in energy and communications). China’s ambitions and capabilities with regard to new areas and its geopolitical competitors are also being tested here. For the time being, it can be said that China has achieved vast success: its offer is appealing for the region, and Beijing has outpaced its Western rivals and has seriously challenged Russia’s position in the region. It remains, however, an open question whether China will be able to maintain and secure its present achievements and trends, which will be a serious challenge given the eternal instability in the region and Russia’s reintegration ambitions.

The Great Game around Turkmenistan. OSW Point of View, August 2008

The rise of a new leader of the state of Turkmenistan – President Gurbanguly Berdymukhammedov, who became ruler of the central Asian state after the 21-year rule of Saparmurad Niyazov, the self-proclaimed Turkmenbashi, who died on December 21, 2006 – has initiated changes in Turkmenistan’s political life. The new president has broken with the previous policy of self-isolation, and has directed the country towards openness to the outside world. Opportunities have thereby arisen for competitors in the ‘Great Game’, to gain political influence in Turkmenistan and access to hitherto unexploited Turkmen deposits of gas and oil. A new stage in the Great Game, which has been played for influence in Central Asia and control of access to its energy resources for many years, can thus be said to have been launched, and Turkmenistan has become the main setting for it. The major actors involved are Russia, the United States, China and the European Union.

Nagorno-Karabkh - conflict unfreezing. OSW Commentary No. 65, 2011-10-26

The conflict between Armenia and Azerbaijan over Nagorno-Karabakh poses the greatest challenge to the security and stability of the Southern Caucasus. Although a ceasefire has been in place and a peace process under way since 1994, there is growing concern that the threat of the resumption of military action is growing. Proof of that is provided by, for example, the arms race dictated by Azerbaijan and its use of war rhetoric. A major factor, in addition to Azerbaijan’s increasing potential and ambitions, which is destabilising the situation concerning Karabakh seems to be the changing geopolitical situation in this region. Although the outbreak of a new war over Nagorno-Karabakh seems unlikely (as this would be risky to all the actors involved) within the next year, if the current trends continue, this will be difficult to avoid in the future. A further increase in the tension, and especially a military conflict (whatever its outcome), will lead to deep changes in the situation in the Southern Caucasus and in the policies of the countries which are active in this region.

Southern Gas Corridor managed by Azerbaijan and Turkey. OSW Commentary No. 86, 2012-07-18

The Southern Gas Corridor is a European Commission initiative with the aim of facilitating the diversification of the routes and sources of gas imported into Europe in the hope of reducing the EU’s dependence on Russia. Although the Southern Gas Corridor – alongside the EU’s flagship Nabucco project, which constitutes a part of the Corridor – was originally conceived as a means of furthering the interests of the West (officially the EU but in practice also the US), the implementation of the project has become possible almost exclusively thanks to measures taken by Azerbaijan and Turkey. Consequently, a project which the EU had hoped would protect its political interests has indirectly given Azerbaijan and Turkey considerable influence over the EU, since it is those two countries that have effectively begun to define the shape of the Southern Corridor. This became particularly clear when the Trans-Anatolian gas pipeline (TANAP) agreement was signed on 26 June 2012. If the EU wishes to ensure that the implementation of the Southern Gas Corridor project retains at least some of its original design, Brussels has little choice but to take into account the preferences of Azerbaijan and Turkey at the expense of its own original plans.

Turkey's economy: a story of success with an uncertain future. OSW Commentary No. 120, 2013-11-05

In the decade since the Justice and Development Party (AKP) came to power, Turkey’s economy has become synonymous with success and well-implemented reforms. Economic development has been the basis of both socio-political stability inside the country and of an ambitious foreign policy agenda pursued by the AKP. However, the risks associated with a series of unresolved issues are becoming increasingly apparent. These include the country’s current account deficit, its over-reliance on short-term external financing, and unfinished reforms, for example of the education sector. This leaves Turkey exposed to over-dependence on investors, especially from the West. Consequently, Ankara has become a hostage of its own image as an economically successful state with a stable socio-political system. Any changes to this image would cause capital flight, as exemplified by the outflow of portfolio investment1 and an increase in the cost of external debt2 that followed the nationwide protests over the proposed closure of Gezi Park last summer. In addition, Turkey remains vulnerable to potential changes in investor sentiment towards emerging markets.

The Eurasian Economic Union – more political, less economic. OSW Commentary Number 157/20.01.2015

The Eurasian Economic Union is undoubtedly the most comprehensive form of economic integration of the post-Soviet countries since the break-up of the Soviet Union. However, the way in which the integration process has been unfolding, as well as Russia’s aggressive policy over the last year, are indications that the EEU has become primarily a political project, and the importance of its economic aspects has eroded. This has triggered a change in the way Kazakhstan and Belarus treat the EEU. Initially, the two countries viewed integration as an opportunity for the development of genuine economic co-operation. However, Russia’s annexation of Crimea and the conflict in Ukraine have revealed the real significance of the EEU project – as a tool to reinforce Russian influence in the post-Soviet area and isolate the post-Soviet countries from the West and China. While the Kremlin presents the EEU as the Eurasian equivalent of the European Union, the project is in reality an imitation of integration. The reasons for this include the nature of the political systems in the participating countries, which are authoritarian, prone to instrumentalise law, and affected by systemic corruption; the aggressive policy that Russia has been pursuing over the last year; and Russia’s dominant role in defining the shape of the EEU. The EEU appears to be based on forceful integration, and is becoming less and less economically attractive for its member countries other than Russia. Moreover, it is clearly assuming a political dimension that those other member countries perceive as dangerous. For these reasons, its functioning will depend on the power and position of Russia. In the longer term it is likely that the other member states will try to ‘sham’ and delay closer integration within the EEU. This means that if Russia becomes politically and economically weaker, the EEU may evolve into an increasingly dysfunctional organisation – a development that will be reinforced by the low standards of legal culture in its member states and their reluctance to integrate. Should Russia’s power increase, the EEU will become an effective instrument of Russian dominance in the area of the former USSR.

The Southern Gas Corridor. The Azerbaijani-Turkish project becomes part of the game between Russia and the EU. OSW POINT OF VIEW 53, 2015-08-20

The Southern Gas Corridor is a system of three complementary gas pipeline projects controlled by Azerbaijan and Turkey, each at a different stage of implementation. The crisis in EU-Russia relations over Ukraine has made the two players interested in the Southern Gas Corridor once again. Brussels views it as an opportunity for a genuine diversification of gas supplies and a way to reinforce its position against Russia. In turn, Moscow’s proposal for Turkey and Greece to join the Turkish Stream gas pipeline project changes the energy map of the regional projects, which indirectly affects the Southern Gas Corridor. This has raised concern in Azerbaijan, which has been making efforts to manoeuvre between the interests of Moscow and Brussels.