On January 4th, the Caspian Policy Center in Washington DC held a discussion with the US Ambassador to Kazakhstan, Daniel Rosenblum. The Ambassador shared a few insights about current US priorities in this large Central Asian country. Starting his remarks by sharing his thoughts on the importance of Kazakhstan, Rosenblum noted that just the fact of its geopolitical and “geostrategic” location has “an intrinsic importance to US interests and US foreign policies.” Acknowledging this as a starting point, he went on to emphasize that “stability” and “sovereignty” are the main strategic goals that the US has had for Kazakhstan since 1991.
Kazakhstan, a geographically remote and landlocked nation that is nonetheless rich in land and resources, has long been an area of strategic interest for the West and, in particular, the United States of America. This interest began long before Kazakhstan achieved independence from the USSR in 1991 and has continued over the thirty years since.
Kazakhstan’s nuclear arsenal was one of the initial areas of global attention after independence. Kazakhstan inherited over 1200 nuclear warheads for intercontinental ballistic missiles and about 1800 nuclear weapons from the USSR. These deadly parting gifts were kept at storage depots (previously under the control of the Soviet army) located across the vast Kazakh steppes. The country was estimated after independence to possess the fourth largest nuclear arsenal in the world, following only the United States, Russia, and Ukraine in its amount of weaponry. Given Kazakhstan’s status as a nuclear power, global leaders such as British Prime Minister Margaret Thatcher and President George H.W. Bush placed Kazakhstan on their list of strategic interests.
It was not only nuclear capabilities, however, that drew the interest of the West, including the United States. Kazakhstan is blessed with extensive natural resources and its abundant oil and gas were attractive to other nations. Had the USSR moved more quickly to develop Kazakhstan’s oil industry, the story might have been different. By the time Kazakhstan was about to acquire independence, however, Soviet oil production was plunging into misery. Russia, one of the most powerful countries in the world, so competitive scientifically that in 1961 it sent the first human into space, by the end of 1980s suddenly lost its economic dominance and was unable to finance its ambitious energy projects.
Due to a lack of funds and technology, Soviet leadership kept postponing developing the rich oil fields located in the western part of Kazakhstan. According to the most modest estimates found in the archival document written by “Vnesheconombank of the USSR” (which translates as “Bank on foreign economic activity”), the cost of developing the most lucrative Kazakh oil field (the Tengiz oil field), was equal to at least $554 million.
The same situation faced by the Tengiz oil field was also true of the Karachaganak gas condensate field— its development was far behind its original launching dates, due to the same reason — lack of money and technology on the part of the USSR.
Having spent $850 million on drilling the Tengiz oil field, the Soviet Union finally gave up on further exploration. The issue of what to do with the Tengiz field was brought up to the highest level of Soviet leadership — Mikhail Gorbachev, the first and only President of the USSR. Gorbachev then decided to leverage the deal during talks with then President George H.W. Bush. According to some sources, in June 1990, during Gorbachev’s three-day visit to Washington, DC when the two presidents met to discuss the future of Germany and its place in the global political environment, Gorbachev raised the idea of creating a joint venture to develop the oil field in Kazakhstan.
On September 9, 1990, the two global leaders met again in Helsinki, for a one-day summit focused on the Gulf crisis. The summit was organized at the initiative of George H. W. Bush who needed Gorbachev’s support in the UN for his war against Iraq. Vladislav M. Zubok in his insightful book “Collapse: The Fall of the Soviet Union” claims that Gorbachev also was in need of aid. With his authority “in precipitous decline” and his Communist Party “irreparably weakened” (as described by the CIA), he was desperate for help from the USA. He needed American money for his economic reforms. Cooperation with the United States on exploration of the Tengiz oil field was one of the crucial issues on Gorbachev’s agenda. Zubok notes that the next day, on September 10, Bush sent James Baker, his Secretary of State from Helsinki to Moscow where he joined the US Secretary of Commerce Robert Mosbacher and a delegation of American businessmen to discuss joint ventures in the Soviet area. They initially were supposed to meet with the head of the Soviet “Gosplan” (Planning Agency). Gorbachev himself, however, invited them to the Kremlin and promised them his support in exchange for investing money in joint ventures in the former Soviet Union, including the project aimed at developing the underinvested but highly promising Tengiz oil field in Kazakhstan.
In July 1991, during the last superpower summit between Bush and Gorbachev, the story of investing in Kazakhstan’s enormous oil field reached its final phase. At that time, Gorbachev invited Nursultan Nazarbayev, the Kazakh leader, to take part in the talks and to actively discuss a business deal with the multi-national giant Chevron.
Reaching a deal with Chevron, and bringing in billions and billions of American dollars for drilling the Tengiz oil deposits seemed like a happy ending. Kazakhstan successfully became the first post-Soviet country involved in a joint enterprise with the United States and continues to this day to enjoy the fruits of a long-term and lucrative partnership. Reaching that last chapter, however, was no fairy tale. It took monumental diplomatic efforts from both countries to overcome the frustrations of trying to reach a deal. The players involved had to surmount Soviet red tape in addition to a number of obstacles created by the United States. In the end, signing the deal with Chevron meant more than just creating a joint venture with Americans. It also meant that Kazakhstan had to make a huge political commitment towards nuclear disarmament. To secure the deal with Chevron, Kazakhstan had to sign the Nuclear Non-Proliferation Treaty and The Strategic Arms Reduction Treaty. It also had to remove 120 Soviet SS18 nuclear missiles from Kazakhstan’s territory.
James Baker, the first Western outsider to visit Kazakhstan during the crucial days of its parting with the Soviet Union, arrived with an agenda focused on nuclear drawdown. According to Serhii Plokhy in his book “The Last Empire”, Baker came tasked with the U.S. mission of a “unique responsibility to support reform efforts” in Kazakhstan and other Central Asian countries. Baker came to visit Kazakhstan in September 1991, right after the tragic Soviet coup and later returned to Kazakhstan in December of 1991. His back-to-back trips served as strong proof that the USA had begun to consider Kazakhstan as an important strategic player in the global arena.
Thirty-two years after Baker’s visits, Kazakhstan is a country that has undergone significant changes. It is no longer a country with nuclear weapons on its territory. Large oil fields are not currently up for grabs - Western/American investors are already actively working there pumping oil for global customers. Also, Kazakhstan does not have the same leader - Nursultan Nazarbayev, whose role in facilitating strategic negotiations with American leaders and businessmen was instrumental, stepped down as President in 2019. Having ruled the country since the early years of independence, after almost three decades in power, he passed the reigns over to Kassym-Zhomart Tokayev, a career diplomat and experienced Kazakh politician.
There was a day when, in the words of former President Nazarbayev, what Kazakhstan needed from the USA was only “advisors and investors”. With Kazakhstan transformed over its 30 years of independence, the question must be raised if that description is still accurate. What does Kazakhstan want from the US and what does the US seek from Kazakhstan? What is now driving the relationship between the two countries?
According to Ambassador Rosenblum’s statement given at the Caspian Policy Center, the US basically has four main “lines of effort” in Kazakhstan (and other Central Asian countries). The first one is a “political and diplomatic front” where the USA works “to try to find common interests” and “where it can advocate for certain policies internationally” together with Kazakhstan and other Central Asian countries. “The second line of effort”, in his words, “is in security and having everything having to do with border security, counterterrorism, addressing transnational threats, and helping” Kazakhstan “to be better able to defend itself and provide for its own security.” The "third line of effort”, according to Ambassador Rosenblum, is “economic” which is “about building more trade and investment ties” and “helping Kazakhstan in this case with many internal reforms that it undertakes where the US can provide technical assistance to help it be more successful.” And finally, “the fourth line of effort” is related to the issue of “human rights, human dimension, government basket of issues.” As Ambassador Rosenblum highlighted in his speech in Washington DC, work in the area of human rights is of great importance to the United States.
Given these four focal points, it’s natural to ask how the US and Kazakhstan are doing in these key areas of American-Kazakh engagement. According to Ambassador Rosenblum, there has been significant progress “at a different pace and in different areas.” One of the “notable achievements” he mentioned was the historic C5+1 meeting in New York that occurred in September last year. This meeting was the first time in history when the C5+1 summit brought together the leaders of five Central Asian countries and the US President.
On the economic front, according to the US Ambassador, US-Kazakh bilateral trade in 2023 will likely increase by 15% more than the $3bn level the countries achieved in 2022. Direct foreign investment by the United States in Kazakhstan, he believes, will be “another $5bn of new FDI in 2023.” As it was in the 1990s, this investment is still mostly investment in oil and gas. According to Ambassador Rosenblum, however, the US “put a big focus in 2023 and began to make progress” in developing the so-called “Middle Corridor”, the Trans-Caspian Route. So, in the future, we may see further development in infrastructure and not simply in the familiar oil and gas sectors, although oil and gas will continue to be workhorses for the Kazakh economy.
As for the human dimension of investment by the US in Kazakhstan, the main emphasis is on developing educational partnerships. As well, there are high hopes for a Human Rights initiative that will focus on the issues of human trafficking, domestic violence, and the fate of “opposition politicians” who have been imprisoned for openly expressing their opinions about the political situation in Kazakhstan.
Ambassador Rosenblum added some levity to the conversation at the Caspian Policy Center by sharing false information that the Russian media is actively spreading in the region. He joked that the US has moved “a whole slew of bioweapon labs from Ukraine to Kazakhstan” and he “personally” opened a NATO training Center in Almaty in October last year. Of course, these statements were not meant to be taken seriously. The truth is that what the Russian media falsely labeled a NATO training Center was actually an international peacekeeping training center in Almaty that the US helped to establish and support.
Are Kazakh foreign relations entirely focused on the United States? Of course not. Direct neighbors such as Russia and China (as well as with the rest of Central Asia) are of high priority to Kazakhstan. Given the strategic and economic weight of the United States in the global system, however, cooperation with the USA has always been a focal point for Kazakh diplomacy. The United States still remains one of the largest sources of foreign direct investment in Kazakhstan and of other financial, technological, and military assistance to the country.
Although Kazakhstan’s nuclear arsenal and its enormous oil reserves are no longer a crucial part of the diplomatic agenda between Kazakhstan and the United States, there are still many areas for US-Kazakh strategic cooperation. According to Ambassador Rosenblum, one of the priorities for the future will be the so-called B5+1 meeting, which is “sort of a private sector parallel structure of business associations and US businesses” interested in exploring the market of Kazakhstan and Central Asia. The critical mineral dialogue is another area of strategic interest, as well as the Trans-Caspian corridor that was mentioned earlier. The discussion at the Caspian Policy Center also touched on the topic of climate change. Mitigating the impact of climate change on Kazakhstan is also an area of potential participation for US companies, including working to prevent the depletion of the Caspian Sea.
While Kazakhstan and the United States may seem to be worlds away, there is actually a long and rich history of interaction between the two countries. That partnership continues to this day. Whether it is in exporting oil, working on human rights issues, or coming together on infrastructure projects, the United States and Kazakhstan have much more road ahead that they can travel together. Their current engagement may not closely resemble the fraught days of the 1990s when diplomatic relations included dealing with a giant nuclear arsenal, but the relationship between them is still of great value and potential benefit to both countries.
By Assel Nussupova
Assel Nussupova is a highly accomplished analyst with an extensive background in economics and over two decades of dedicated service to the Kazakh government. Holding a prestigious Master's Degree in Economics from Georgetown University in Washington, DC, she has become a recognized authority in the fields of macroeconomics, commodity markets, financial markets, and economic and social policies. With a profound understanding of Kazakhstan's economic landscape and a global perspective, Nussupova is a sought-after expert who continues to contribute valuable insights to the field of economics. Additionally, she is a prominent contributor to the Astana Times, where her articles provide readers with expert analysis and in-depth perspectives on economic matters.
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