Foreign Policy Diversification and Intercontinental Transport Corridors: The Case of Kazakhstan’s Railways Diplomacy

Abstract

Building on recent scholarship, this essay contributes to further developing a conceptual understanding of multivector foreign policy, a term that, despite its frequent use, is still in need of additional refinement. I use the two-pronged concept of diversification as hinging, first, on simultaneous co-alignment with multiple major power providers and, second, as resulting from the interaction of variables at both system and unit levels. The essay then models a causal mechanism to explain Kazakhstan’s approach to international infrastructure connectivity, an oft neglected issue-area of interstate collaboration.

The author wishes to acknowledge the helpful comments of Cristian Nitoiu and the journal’s two reviewers, as well as the research assistance of Aigerim Mendygarina and Guldana Akhmetzhanova. A special thanks goes to Hon-Seung Roh at the Korea Transport Institute.

Notes

¹ Central Asia: Increasing Gains from Trade through Regional Cooperation in Trade Policy, Transport, and Customs Transit (Manila, Asian Development Bank, 2006).

² ‘Russia Hits West with Food Import Ban in Sanctions Row’, BBC News, 7 August 2014.

³ Although there had been plans for a rail link between the Soviet Union and China via Druzhba (now Dostyk) on the Kazakhstan–Xinjiang border, this was suspended following the Sino–Soviet split of the 1960s. For this reason, it was only in July 1991 that the first cargo train crossed the border at Dostyk.

⁴ Railway Infrastructure. Upside Transit Potential (Astana, Samruk Kazyna, 2017), available at: https://sk.kz/upload/iblock/4f8/4f820a420251411cc1a3437cdd678a35.pdf, accessed 26 April 2018.

⁵ For example, Kazakhstan is a strong supporter of the Collective Security Treaty Organisation’s (CSTO) decision in 2009 to set up a 17,500-strong Collective Rapid Reaction Force (McDermott 2011, p. 9), which now coexists with Astana’s equal determination to improve its KAZBAT deployable battalion with NATO assistance. The country also receives military training and education from China, which is described by a senior Kazakhstani Ministry of Defence official as one of his country’s ‘priority’ defence partners (Weitz 2013a). On another note, Eurasian states simultaneously pay lip service to Western values as demanded by their membership of Euro–Atlantic organisations such as the Organisation for Security and Cooperation in Europe (OSCE), while emphasising the principles of sovereignty and non-interference espoused by Eurasian organisations (and their principals), such as the Shanghai Cooperation Organization (SCO) and the CSTO, as a parallel source of international (re)legitimation.

⁶ Other notable projects are being promoted by ASEAN, India, Iran, Japan and South Korea. All of these countries and entities have adopted Silk Road policies of some kind. For a full review and visuals of alternative initiatives of continental connectivity and their different sponsors, see ‘Map: Reconnecting Asia’, Center for Strategic and International Studies, 2017, available at: https://reconnectingasia.csis.org/map, accessed 4 June 2018.

⁷ The Strategy for Development of the Republic of Kazakhstan until the Year 2030 (Astana, The President of the Republic of Kazakhstan, 1997); Kazakhstan 2050 (Astana, The President of the Republic of Kazakhstan, 30 November 2015); Nurly Zhol—The Path to the Future (Astana, The President of the Republic of Kazakhstan, 11 November 2014); The 100 Concrete Steps Set Out by President Nursultan Nazarbayev to Implement the Five Institutional Reforms (Astana, Strategy2050.kz, 20 May 2015).

⁸ Foreign Policy Concept 2014–2020 (Astana, Ministry of Foreign Affairs, 9 May 2014).

⁹ ‘MFA: Kazakhstan Actively Participates in Silk Road Projects’, Kazinform, 3 May 2016.

¹⁰ ‘Nazarbaev predlozhil inostrannym investoram proekt “Novyi Shelkovyi put”’, Tengrinews.kz, 22 May 2012; emphasis added.

¹¹ From east to west, Kazakhstan’s territory is part of three main international transport corridors. First, the northern corridor of the Trans Asian Railway (TAR) (Western Europe–China, Korea and Japan via Russia and Kazakhstan (Dostyk–Almaty–Aktau)); second, the southern corridor of the Trans Asian Railway (TAR) (southeastern Europe–China and southeast Asia via Turkey, Iran, Central Asian counties and Kazakhstan); and third, the Transport Corridor Europe–Caucasus–Asia (TRACECA) (Eastern Europe–Central Asia via the Black Sea, Caucuses and the Caspian Sea). From north to south, it is part of the north–south corridor: northern Europe–Persian Gulf countries via Russia, Iran, Kazakhstan. See, Transport Strategy of the Republic of Kazakhstan until the Year 2015 (Astana, Ministry of Transport and Communications, Government of Kazakhstan, 2006).

¹² The overland option will only ever attract a niche of the freight market. The economies of scale of a train loaded with some 50–100 containers pale in comparison to those of a cargo ship carrying in the region of 11,000. See, ‘China’s Silk Road Initiatives could Shake up European Port Cities’ Status Quo’, China Economic Review, 8 September 2015.

¹³ In its original layout the Trans-Asian Railway comprised a northern, a southern and a central route.

¹⁴ Author’s interview with respondent 1, Astana, 7 October 2016.

¹⁵ ‘MFA: Kazakhstan Actively Participates in Silk Road Projects’, Kazinform, 3 May 2016.

¹⁶ Author’s telephone interview with respondent 2, Astana, 6 October 2016.

¹⁷ ‘Kazakhstan Develops New Railway Corridor Project’, Kazinform, 4 June 2015; See also: ‘Kazakh Railways: Back to the Future’, Kazworld, 21 December 2009.

¹⁸ Nurly Zhol Transit Project Implementation. The Future of Cargo Transit China to Europe (Astana, German Kazakh Business Council, 2016).

¹⁹ Yu = Chongqing, Xin = Xinjiang, Ou = Europe.

²⁰ ‘Japan Presents Plans for Container Transit Route through Kazakhstan to Europe’, Astana Times, 7 May 2017.

²¹ ‘Nippon Express Signs Kazakhstan MoU’, FreightWeek, 16 August 2017.

²² ‘First Rail Service China–Netherlands Launched’, Port of Rotterdam, 28 September 2016.

²³ ‘Container Train from London to Yiwu Makes First Trip through Kazakhstan’, Astana Times, 14 May 2017.

²⁴ Askar Mamin served as president of KTZ from April 2008 to September 2016, when he was appointed First Deputy Prime Minister.

²⁵ See ‘100 Concrete Steps to Implement the 5 Institutional Reforms’, Embassy of Kazakhstan to the United States, available at: https://www.kazakhembus.com/content/100-concrete-steps-implement-5-institutional-reforms, accessed 2 April 2018.

²⁶ Partnership and Cooperation Agreement between the European Union and the Republic of Kazakhstan, Art. 55.

²⁷ See, ‘Memorandum of Understanding in the Field of Transport Networks Development Between the European Commission and the Ministry of Transport and Communications of the Republic of Kazakhstan’, available at: http://eeas.europa.eu/archives/delegations/kazakhstan/documents/eu_kazakhstan/memorandum_field_transport_en.pdf, accessed 26 April 2018.

²⁸ Implementation and Review of the European Union–Central Asia Strategy: Recommendations for EU Action (Brussels, Directorate-General for External Policies, Policy Department, European Parliament, 2016, p. 95).

²⁹ The EU has supported this programme with some €180 million spread over more than 80 projects in its beneficiary countries, including Kazakhstan, Azerbaijan, Armenia, Bulgaria, Georgia, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Turkmenistan, Ukraine and Uzbekistan. TRACECA also furthers an agenda of supporting the political and economic independence of its beneficiaries by giving them ‘access to European and world markets through alternative transport routes, encouraging further regional co-operation amongst the partner countries and increasingly being a catalyst to attract the support of International Financial Institutions (IFIs) and private investors’. See, ‘Central Asia—Transport’, International Cooperation and Development, European Commission, available at: http://ec.europa.eu/europeaid/regions/central-asia/eu-support-transport-development-central-asia_en, accessed 30 January 2018.

³⁰ ‘Progress Report II’, TRACECA Co-ordination Team Report, 1 December 2002, Annex 3.2.

³¹ ‘MFA: Kazakhstan Actively Participates in Silk Road Projects’, Kazinform, 3 May 2016.

³² ‘Huge Potential Exists for Freight Traffic through Azerbaijan’, Trend, 13 October 2016.

³³ Author’s personal communication with respondent 5, Astana, 25 January 2018.

³⁴ It is likely to address these concerns, that, at the beginning of 2016, Kazakhstan reduced its rates on rail cargo along the Dostyk–Aktau route by 24% from 2015 (Parkhomchik 2016).

³⁵ Author’s personal communication with respondent 5, Astana, 25 January 2018.

³⁶ ‘First Train on Turkish Section of Kars–Tbilisi Railway’, Railway Gazette, 24 July 2017.

³⁷ Conceivably, the line in question is the high-speed railway under discussion with China. See, ‘Round Table on Development of Trans Caspian International Transport Route—Press Release’, Turkic Council, Istanbul, 19 November 2015.

³⁸ The single rate entered into force on 1 June the same year. Ukraine was then admitted to the Association as a partner, represented by PJSC UkrZalizNytsia and LLC UkrFerry (Shirinov 2016c).

³⁹ ‘New Rail Routes between China and Europe will Change Trade Patterns’, The Economist, 16 September 2017.

⁴⁰ ‘Factsheet’, Project of Establishment the International Center for Boundary Cooperation ‘Horgos’, Kazakhstan Temir Zholy, undated.

⁴¹ ‘Chinese Companies Buy Stake in Dry Port in Kazakhstan’, Xinhua, 15 May 2017.

⁴² PCS is a process automation platform developed by DP World subsidiary Dubai Trade that enables the exchange of multimodal data. See, ‘Nippon Express Signs Kazakhstan MoU’, Freightweek, 16 August 2017.

⁴³ See also ‘China to Invest $600 million in Joint Logistics Projects with Kazakhstan Railways’, Think Railways, 2 September 2015.

⁴⁴ ‘Kazakhstan Temir Zholy Inks Memo with Nippon Express Co. Ltd’, Kazinform, 17 August 2017.

⁴⁵ ‘Nasha glavnaya tsel’—svyazat’ vostok i zapad’, Press sluzhba ‘KTZE–Khorgos Gateway’, 9 October 2015.

⁴⁶ ‘In Kazakhstan Reconstruction of the Sea Port in Aktau is Almost Completed’, Reuters, 18 August 1999.

⁴⁷ ‘Sberbank to Finance Aktau Port Expansion Project’, Think Railways, 5 November 2014. The loan followed the conclusion of a MoU worth $3.6 billion between Sberbank and KTZ to finance infrastructure projects such as trunk railway lines, seaport infrastructure, and transport and logistics centres, with particular reference to Aktau. See, ‘Sberbank of Russia to Finance $3.6 Billion Worth of Transportation Projects in Kazakhstan’, Tengrinews, 16 June 2014.

⁴⁸ ‘Expansion of Aktau Seaport to be Completed in 2014’, Tengrinews, 23 January 2014.

⁴⁹ Special Economic Zone ‘Aktau Seaport’, official website, 2016, available at: https://www.sez.kz, accessed 1 April 2018.

⁵⁰ ‘JSC “NC” “KTZ” and “DP World” Will Jointly Develop Aktau Seaport and Khorgos–Eastern Gate FEZ’, Kazakhstan Temir Zholy, Press release, 18 April 2013; ‘Kazakhstan’s Infrastructure Development at the Port of Aktau, and in Khorgos in the East of the Country is Gaining Momentum’, World Maritime News, 15 July 2014.

⁵¹ ‘Aktau Port has Reached Record Levels in Shipping Towards Iran’, Portaktau.kz, 8 September 2016.

⁵² ‘Port Aktau posetila delegatsiya Islamskoi Respubliki Iran provintsii Gulistan’, Portaktau.kz, 8 December 2016.

⁵³ ‘A Meeting of Brother-ports was Held in Baku–Port Aktau’, Portaktau.kz, available at: http://www.portaktau.kz/en/events/3141, accessed 2 May 2018.

⁵⁴ ‘International Investment Forum “Development of Investment and Transit Potential of Mangystau” was Held in Aktau’, Portaktau.kz, 21 July 2017.

⁵⁵ ‘Port Aktau priniyal uchastie v prazdnovanii Dnya porta Konstantsa v Avstrii’, Portaktau.kz, 6 October 2016.

⁵⁶ ‘Aktau and the Chinese Port Qingdao to Coop in Economy, Tourism’, Kazinform, 23 October 2014; ‘Aktau Seaport was Visited by a Delegation from China’, Portaktau.kz, 23 August.

⁵⁷ The Ambassador of Estonia in Kazakhstan headed a visit to the port in 2017 in view of promoting future cooperation. See, ‘Delegation of the Embassy of the Republic of Estonia Visited Aktau Port—Port Aktau’, portaktau.kz, 18 September 2017.

⁵⁸ The German Ambassador to Kazakhstan paid a visit to the port in June 2016. In 2009, the Mangistau regional government sent a delegation to Hamburg to expand cooperation with the Port of Aktau.

⁵⁹ The Magnitogorsk-based steelmaker OJSC MMK are interested in using the Port of Aktau in partnership with JSC ‘KTZE’, to ferry their steel to Baku along the trans-Caspian international transport route. See, ‘MMK Interested in Possibilities of Transhipment of Steel Products through the Port of Aktau’, portaktau.kz, 14 September 2016.

⁶⁰ Turkmenistan is interested in establishing cooperation between the ports of Turkmenbashi and Aktau. The Turkmen consulate in Aktau organised a roundtable to explore opportunities with the port administration and various other players, including KTZ and Aktau International Airport. ‘Konsul’stvo Turkmenistana provelo kruglyi stol s uchastie predstavitelei transportnoi infrastruktury Mangistau’, portaktau.kz, 18 November 2016.

⁶¹ In September 2016, representatives from Port of Aktau and KTZ participated in a forum in Tashkent to present the potential of TITR as a route for delivering Uzbek cargo through the seaports of Kazakhstan and Azerbaijan to the countries of the Black Sea basin and Europe. ‘A “Round Table” was held in Uzbekistan Organised by the Port of Aktau–Port Aktau’, portaktau.kz, 24 May 2017. The port’s president then travelled back to Tashkent in September as part of a delegation to a bilateral business forum headed by the President of Kazakhstan. See, ‘The President of Aktau Port Took Part in the Business Forum in Tashkent’, portaktau.kz, 18 September 2016.

⁶² ‘New Logistics Center Launched with China’, Economist Intelligence Unit, 21 May 2014.

⁶³ More specifically, the total investment of $99.3 million saw Lianyungang Port Group Company put $35.1 million, KTZE another $33.7 million, with the rest financed by Chinese banks (Bukeeva 2017). ‘Construction of Kazakhstan Terminal in Lianyungang Port Launched’, Embassy of Kazakhstan in Singapore, 20 May 2014. The agreement was reached in September 2013 during Xi’s landmark visit to Astana (the one in which OBOR was first unveiled) but unveiled the following year during a visit to China by the Kazakh president.

⁶⁴ ‘Predsedatel’ pravleniya-prezident porta Lianyungang, Zhu Xiangyang: “Vperedi novye interesnye proekty”’, Transitkazakhstan.kz, 5 June 2015.

⁶⁵ ‘Lianyungang: A Maritime and Overland Channel for China–Kazakhstan Trade’, China Today, 21 June 2017.

⁶⁶ ‘Kazakhstan’s Railway Company Interested in Using Baltic Terminal Services’, BNN, 21 November 2016.

⁶⁷ ‘“Central Dry Port” in Moscow Region’, Intessa Group, Press release, 9 June 2017.

⁶⁸ ‘Rail Linking Europe to Open Up China’s West’, Xinhua, 2 July 2011; ‘Germany Plans to Expand Chinese Rail Link as Xi Visits Duisburg’, Bloomberg Businessweek, 28 March 2014.

⁶⁹ ‘DHL Signed a MoU in Moscow in March with the “Project Office of UTLC” Ahead of the Company’s Official Incorporation Later this Year’, Freightweek, 28 March 2014; Briginshaw (2014).

⁷⁰ ‘Chang’an Intl Cargo Train Begins Operation’, China Daily, 29 November 2013.

⁷¹ ‘Chang’an Cargo Train Links Shaanxi–Central Asia’, CQ News, 14 May 2014.

⁷² ‘Trans Caspian Transport Consortium to Operate TITR from China to Europe’, Eurasian Business Briefing, 4 December 2015; ‘Azerbaijan, Kazakhstan, Georgia Creating Transportation Consortium’, Trend.az, 13 April 2016.

⁷³ ‘Economic Newsletter on Kazakhstan’, Embassy of the Netherlands in Kazakhstan, December 2015.

⁷⁴ Author’s personal communication with respondent 3, Astana, 25 October 2017.

⁷⁵ Author’s personal communication with respondent 4, Astana, 31 October 2017.

⁷⁶ This amounted to 4.4 million tonnes and was expected to record a 23% increase by the end of 2016 to nine million tonnes. There are now plans to reach 11.5 million tonnes in 2017. See, ‘Volume of China–Kazakhstan–Europe Rail Freight Transport Expected to Increase by 23% in 2016’, Think Railways, 29 August 2016.

⁷⁷ China-bound trains alone increased more than 600% to 205 (17,744 TEU), from just 28 in 2014 (2,318 TEU). See, ‘Innovations and Investments Behind China–Europe Rail Freight Transport’, Think Railways, 23 May 2016.

⁷⁸ By way of illustration, on the Russian side, RZD estimated the cost of shipping a 20-foot container from Germany or Finland to India via Suez in the amount of $3,500 against $2,450 through INSTC. See, ‘North–South. Brief Description of the North–South Corridor’, Rzd.ru, 2016.

⁷⁹ Secretariat of the International North–South Transport Corridor (INSTC), 2012, available at: www.instc-org.ir, accessed 28 March 2018.

⁸⁰ ‘Kazakh President’s Visit to Iran Leads to $2 Billion in Bilateral Agreements’, Brussels Times, 26 April 2016.

⁸¹ ‘Iran, Kazakhstan to Boost Railway Co-op’, IRNA, 21 June 2016.

⁸² ‘Kazakhstan joins Ashgabat Agreement on Transit Transport’, Think Railways, 16 February 2015.

⁸³ ‘Kazakhstan, Turkmenistan i Iran vvodyat Edinyi Tarif dlya Konteinernykh Poezdov iz Kitaya’, Trend, 9 October 2015.

⁸⁴ ‘KTZ President, Iranian Transportation Officials Discuss Development of Eurasian Transcontinental Corridor’, Astana Times, 25 February 2016.

⁸⁵ ‘Mezhdu AO «NK «KTZH» i Ministerstvom putei soobshcheniya Indii podpisan Memorandum’, KTZ, undated.

⁸⁶ ‘India to Accede to the Ashgabat Agreement’, Cabinet, Press Information Bureau, Government of India, 23 March 2016.

⁸⁷ ‘Iran to Construct New Line as Part of Circular Railway around Caspian Sea’, Railway Pro, 24 October 2014.

⁸⁸ ‘Real Breakthrough Reached at 4th Caspian Summit—Putin’, Tass, 29 September 2014.

⁸⁹ ‘Russian Railways and Kazakhstan Temir Zholy Sign the Strategic Cooperation Agreement’, Railway News, 5 September 2017.

⁹⁰ ‘More by Rail between India and Kazakhstan’, International Transport Journal, 15 July 2015.

⁹¹ ‘National Company “Kazakhstan Temir Zholy” JSC and the “Sberbank” Signed a Memorandum on Cooperation in the Area of Financing the Projects in India’, JSC Kazakhstan Temir Zholy Press Office, 18 June 2015.

⁹² ‘Press Release—Sberbank and KTZ Sign Memorandum of Cooperation on Project Financing in India’, Sberbank of Russia, 18 June 2015.

⁹³ ‘Development Perspectives of Cooperation between Kazakhstan and India in Transport and Logistics Sphere Were Discussed at the Seminar in Almaty’, KTZ, 30 March 2018; ‘JSC “NC” KTZ and Indian Logistics Companies are Interested in the Development of Cooperation in the Transport Sector’, KTZ, 28 February 2018.

⁹⁴ ‘More Rail Transport and Logistics Projects for Kazakhstan on the Iranian market’, Think Railways, 23 February 2016; ‘Rail Line to Connect Kazakhstan, Turkmenistan and Iran’, International Transportation Journal, 10 February 2017.

⁹⁵ ‘China and Iran Launch New Container Train via Kazakhstan’, Railway Pro, 2 February 2016.

⁹⁶ ‘JSC KTZ Express, Sinotrans Limited and Lanzhou Pacific Logistics Co., Ltd Agree on Running Regular Container Trains’, KTZ Press Release, 11 July 2017.

⁹⁷ ‘Kazakhstan, Iran Railways Companies Discuss Tariff Conditions for 2017’, Kazinform, 21 February 2017.

⁹⁸ ‘Kazakhstan and Iran are Building Trade and Economic Partnerships’, Kazakh TV, 15 January 2018.

⁹⁹ ‘Iran i Kazakhstan zaklyuchili soglasheniya na $1 mlrd’, Kapital, 11 April 2016.

¹⁰⁰ ‘Economic Newsletter on Kazakhstan’, Embassy of the Kingdom of the Netherlands, Astana, January 2018.

¹⁰¹ ‘Kazakhstan—The New Silk Way: A Strategic Vector of Transport Logistics in Kazakhstan’, Press release, Kazakhstan Temir Zholy, September 2012.

Additional information

Notes on contributors

Nicola P. Contessi

Nicola P. Contessi, Political Science and International Relations, Nazarbayev University, Astana 010000, Kazakhstan. Email: [email protected]