The current direct and harsh confrontation between Russia and the collective West is going to become one of the main and, at the same time, sensitive topics for the Kazakh information space for the next couple of years.
Of course, trying to assess what this impact is going to be from the practical standpoint is quite useless while the Ukrainian crisis continues and the risk of its transforming into the World War III with the use of nuclear weapons remains. Therefore, we will limit ourselves to discussing the issue of how the sanctions already imposed against Russia and Belarus are going to impact their naighbor, Kazakhstan.
First of all, let us underscore that the two most aggressive (from the sanctions-imposing standpoint) Western states - the USA and the UK - have officially stated that they are not going to impose sanctions on Kazakhstan and its economy (see here and here).
This, of course, cannot but please both Akorda and the ordinary Kazakh citizens, however, we at KZ.expert believe that such a state of affairs won’t remain status quo for long.
Why do we think so? Because, at this point, there can be no doubt that the war between Russia and Ukraine is going to be drawn out in one form or another for at least a couple of decades or maybe even longer, as was the case in Korea. And, in these new geopolitical situation, Kazakhstan is bound to become the gate through which the Russian state, business and citizens are going to bypass the sanctions of the collective West.
In our opinion, they are going to be more than successful in this effort since it is hard to find a state willing to support the USA, the UK, the EU and so forth among Kazakhstan’s closest neighbours. How? Very simply - by founding Kazakh companies, opening accounts in Kazakh banks and using Kazakh intermediaries when exporting their products and importing the desired goods, equipment and services thus increasing their mutual turnover.
Since Kazakhstan is situated in the centre of the Eurasian continent between Russia and China, the collective West can do nothing about it apart from pressuring Akorda and Kazakh President Kassym-Jomart Tokayev. Eventually, however, this pressure is not going to bring the desired results. For, Russia and Kazakhstan are knit together not only via the numerous interstate agreements including those in the sphere of the military and political cooperation but via the close trade-economic and socio-cultural ties.
Of course, the current Kazakh President will try to do anything in his power not to irritate the collective West. However, even if he employs the entire might of the Kazakh state vertical, he is going to be defeated. Simply due to the fact that everyone wants to earn one’s daily bread. At the same time, it is uber-hard to stand against tens (if not hundreds) of thousands of Russian and Belarusian legal and physical bodies that will invariably start finding loopholes in the sanction blockade.
This, among other things, means that accelerated convergence of the economies of Russia, Belarus and Kazakhstan, a steadfast tightening and activating of their economic and other relations both on the national and the regional level will be the first and the main impact that the sanctions against Russia and Belarus will have on Kazakhstan.
Economic precariousness will become (or, rather, has already become) the second outcome of this impact. First of all, we are talking about the weakening of the national currency against the world currency as well as a constant inflation growth.
We are not to forecast what the tenge exchange rate against the US dollar is going to be in a year or two, however, the fact that it will invariably repeat the Russian ruble’s trajectory, albeit with certain variations caused by the Russian Central Bank and the National Bank of the Republic of Kazakhstan as well as by the pressure on the part of the West, raises no doubts. In other words, the inflation is going to rise up to two-digit figures while the retail prices and tariffs will grow right before our eyes.
The Kazakhs will have to get used to the idea that we are they be deprived of the possibility to buy a number of goods produced in the West. At the same time, they must realise that this problem will only affect the people with a relatively high income and may be resolved via placing orders through the Internet as well as during their trips abroad.
As for the individual sectors of the national economy, the impact of the sanctions against Russia and Belarus on Kazakhstan will be twofold.
On one hand, the country is, undoubtedly, going to start losing the market outlets and decreasing the exporting of the fact that the bulk of the Kazakh oil is transported to the global market through the Russian territory.
On the other hand, due to the problems with importing Western goods (among other things, thanks to the Russian counter-sanctions), the Kazakh producers are going to gain new opportunities.
We at KZ.expert believe that the time period during which the collective West, first of all the United States and the UK, will try and persuade Kazakhstan is unlikely to surpass a couple of years. And then the sanctions are probably going to be imposed against all the Central Asian states except perhaps Uzbekistan and Turkmenistan.
Of course, contrary to the sanctions against Russia and Belarus, they are not going to be as extreme and, therefore, all-encompassing, fast and harsh. Therefore, within the next two years, the Kazakh government, business and citizens must learn from their northern neighbours how to survive under the sanctions regime with minimal losses.
