Strengthening Multidimensional Ties Between the European Union and the Republic of Kazakhstan During the Presidency of Kassym-Jomart Tokayev
Kazakhstan is an important and trusted partner of the European Union (EU). This is embodied in the Enhanced Partnership and Cooperation Agreement EPCA) with the EU, which entered into force on 1 March 2020 – writes Ipek Tekdemir, who is a Political adviser.
The diplomatic relations between the EU and Kazakhstan have increasingly intensified throughout nearly three decades, and the EU Member States have been among the first nations to recognize Kazakhstan as an independent state in 1991. The European Union opened its formal diplomatic representation in Kazakhstan shortly after, in 1994. Kazakhstan was the first nation among the countries of the Commonwealth of Independent States (CIS) to establish a formal representation to the EU, which reflects the strength of the bond.
The significance of EU-Kazakhstan relations also shows in the trade and investment relationship. The EU is Kazakhstan’s principal trading partner, representing 40% of external trade. The EU is the main foreign investor in Kazakhstan, accounting for 48% of the total (gross) foreign direct investment. Along the way, European businesses and investors have supported the strengthening of the economy of independent Kazakhstan under the leadership of First President Nursultan Nazarbayev, having helped to pave the way for the creation of a free market environment.
Structural Intensification of the Partnership
The entry into force of the Enhanced Partnership and Cooperation Agreement (EPCA) in March 2020 has marked the beginning of a new stage of EU-Kazakhstan relations.
The EU-Kazakhstan EPCA – the first such agreement the EU has concluded with any of its partners in Central Asia – has now entered the stage of its implementation. The Agreement provides an expansive framework for cooperation, not only including the fields of trade and economy, but equally encompassing the socio-cultural and political realms of Kazakhstan-EU relations. The EPCA is expected to give an additional boost to Kazakhstan’s economic, social and political development, adding to President Tokayev’s ongoing efforts.
The EPCA also foresees to further deepen and strengthen EU-Kazakhstan co-operation in the fields of innovation and green technologies, transport, logistics, education, energy, and environmental protection. The Agreement aims to create a stronger regulatory environment for businesses in areas such as trade in services, establishment and operation of companies, capital movements, raw materials and energy, government procurement, and intellectual property rights. The EPCA seeks to offer a platform and provide opportunities both for European and Kazakh business partners to meet and exchange views and best practices.
Being an oil-rich nation, Kazakhstan’s exports to the EU are heavily dominated by oil and gas, which account for more than 80% of the nation’s total exports. Exports from the EU to Kazakhstan, however, are dominated by machinery and transport equipment, and products from the manufacturing and chemicals sectors. The inward investments from the EU in the Central Asian country are notable, with over 4,000 companies with European participation and 2,000 joint ventures operating in Kazakhstan.
It has been a top priority of the Kazakh Government under President Tokayev to intensify efforts to attract foreign direct investment to the country. The initiatives carried out since the election of President Tokayev in 2019 have further improved the business climate and increased economic stability for the EU and other foreign investors to augment their investments in the country. The relaxation of visa requirements for travel to Kazakhstan and creation of business and investment opportunities have been core initiatives in this regard.
Apart from the EPCA, the EU’s Strategy for Central Asia is an important framework for EU-Kazakhstan relations. The year of 2019 witnessed a revision of the EU Central Asia Strategy, with the objective of better addressing the current socio-economic necessities of the region.
With increasing domestic economic growth in Kazakhstan in recent years, EU-Kazakhstan relations have significantly expanded beyond the economic sphere, now encompassing cooperation in an array of socio-cultural and political fields. President Tokayev has been introducing a new political paradigm to the domestic agenda. This includes the “listening state”, greater promotion of pluralism of opinions, the acknowledgement that successful economic reforms rely on socio-political modernisation, and finally the correlation between a strong President, an influential Parliament, and an accountable Government. To deliver on these new paradigms, new liberal mechanisms have been introduced to the Kazakh political culture. The state refuses practices such as blocking the internet or forcibly dispersing protesters, pro-actively embracing inclusive dialogue, and acknowledges the ever-increasing importance of communication and dialogue as the foundation of modern society.
More recently, in his annual Address to the Nation on 1 September 2020, President Tokayev announced the beginning of a new stage of reforms to put Kazakhstan in a favourable position to assert its role on a world stage that is changing fundamentally. The new stage of reforms will encompass a substantial review of the activities of the entire state apparatus, including radical changes at all levels, such as the ambition to develop a real multiparty political system, reform the legislative process, and substantially improve implementation and enforcement of governance standards and the rule of law. A major focus will further lie on economic reforms, based on principles such as the promotion of free-market competition, technological innovation, education, accountability, and green economic development. The concrete steps towards domestic political and socio-economic reforms outlined by the President are of mutual importance to Kazakhstan and the EU. Some of these reform ambitions are even mirrored in ambitious EU policies such as the Green Deal.
The current COVID-19 pandemic has put a particular emphasis on the mutual interests in and vital need for international cooperation between the EU and Kazakhstan. In addressing the crisis, the Kazakh leadership has demonstrated its resilience and commitment to support the health and wellbeing of its people. Under President Tokayev, the Kazakh Government has launched a package of measures to stimulate the economy, just as the EU seeking to seize the crisis as an opportunity to make an additional leap forward, and – in the case of Kazakhstan – to move further towards a diversified economy.
If one were to take stock of the first one and a half years of Presidency under President Tokayev, one could conclude that these first months have brought major progress in view of Kazakhstan’s ambitions for gradual political reform and modernisation, including a further deepening of dialogue and cooperation with the EU in a number of fields.