IN THE NEIGHBORHOOD

Kazakhstan 2014 | DIPLOMACY | FOCUS: CASPIAN RELATIONS

The Caspian Sea has always been strategic for Kazakhstan as an export gateway. It is now hoping to strengthen relations in the region to encourage more growth.

While Kazakhstan is technically a land-locked country, it does have access to the Caspian Sea, which is shares with Russia, Azerbaijan, Iran, and Turkmenistan. The Caspian region is one of the oldest oil producing areas in the world, and its importance on the global stage continues to grow in the energy sphere as natural gas reserves, both onshore and offshore, are developed.

While cooperation since the demise of the Soviet Union between the Caspian countries hasn't always been the most effective, in recent times increased efforts by these nations look set to change that. The establishment of the Customs Union, the Eurasian Economic Community (EurAsEC), and attempts to reestablish the old Silk Road are seen as key developments in cooperation and multilateral trade.

IRAN

In July 2013, President Nazarbayev of Kazakhstan met with incoming President Hassan Rouhani to congratulate him on his victory in the recent elections in Iran. Trade between the two countries has reached $2 billion annually, and both sides look keen to increase this even further. In January 2014, the Iranian Deputy Minister of Industry, Mines, and Trade, Valiollah Afkhami-Rad, visited Astana to meet with his counterpart with the goal of boosting bilateral relations and trade. It was the third sitting of the Kazakh-Iranian Work Group on Trade and Economic Cooperation, where a number of agreements were signed. Kazakhstan's relations with Iran are crucial, as it is the mediator in the nuclear crisis discussions after Turkey pulled out. In February 2013, Kazakhstan hosted the one of the rounds of talks, which the Minister of Foreign Affairs for Kazakhstan, Yerian Idrissov, described as important for Kazakh-Iranian relations. As Kazakhstan is a landlocked country, it hopes that Iran would be able to bridge this gap to allow Kazakhstan's products access to greater markets.

AZERBAIJAN

While Kazakhstan is playing the diplomatic role and looking for access to the oceans through Iran, it is looking toward Azerbaijan to develop energy, business, and tourism agreements. According to the Kazakhstan's Deputy Oil and Gas Minister, Magzum Mirzagaliyev, two-way trade between the two countries was around $360 million in 2013. This leaves considerable room to grow for the two close neighbors. Mirzagaliyev has urged both Azerbaijani and Kazakhstani companies to start joint ventures in each other's countries, and stated that joint ventures established in Kazakhstan would receive “support not only from the government, but from the oil and gas companies." Kazakhstan is also looking to make use of the Baku-Tbilisi-Ceyhan (BTC) pipeline. In 2013, Kazakhstan exported 3 million tons of oil to Azerbaijan, which has the potential to increase even further. Tengizchevroil Company (TCO) has already discharged 200,000 tons of oil into the pipeline, and Mirzagaliyev believes this figure could reach 4 million tons by in 2014, which was also back up by Mirzagaliyev's counterpart Ramiz Rzayev, the Azerbaijani Energy Minister.

RUSSIA

One of the most significant developments in Kazakhstani-Russian relations has been the involvement of the two countries in the EurAsEC and the subsequent Customs Union. Somewhat similar to that of the EU, the idea of the community is ease trade restrictions and travel for citizens of member states, while also providing a platform for heads of state to discuss regional issues. The establishment of the Customs Union between Russia, Kazakhstan, and Belarus has helped to increase multilateral trade between the three nations by more than 50% over the last three years, from $23 billion to $66.2 billion in 2013. The removal of trade barriers by 2015 will further boost this level of trade.