Ex-Polish minister: Russian expansion threatens Kazakh economic sovereignty

Russia is making heavy use of Kazakhstan to evade and mitigate the impact of Western economic sanctions. The situation is threatening Astana’s economic security, according to former Polish labour minister Piotr Kulpa.

“Kazakhstan’s economy is being pumped up with the wooden rouble, which is going to lose its value soon, because they [Russia] have practically exhausted their [national] reserve fund,” Kulpa said in an interview with Kazakhstan School of Applied Politics (KSAP).

“They [Russia’s Central Bank] will have to start printing more roubles already this year, or next year, which will kill both the Russian and Kazakh economies,” he said.

According to KSAP, more than 50 percent of consumer goods, including foodstuffs, on the Kazakh domestic market come from Russia. In some northern regions Russian imports make up more than 80 percent of consumer goods.

The sanctions have also triggered a mass relocation of Russian companies to Kazakhstan. Their total number increased by 70 percent in 2023, reaching more than 20,000.

Russian companies have also been actively buying Kazakh assets. Rosatom has acquired a share in the Budyonovskoye uranium deposit, one of the world’s largest, in southern Kazakhstan.

Russian economic expansion might initially cause economic growth in Kazakhstan, but once the war in Ukraine is over, the Kazakh economy will quickly go downhill, with the country facing price rises and high inflation, Kulpa said.                                                                                                                                    

Moreover, continued Russian economic penetration is jeopardising Kazakhstan’s economic sovereignty, Kulpa, who in the past led various EU projects in Ukraine, said.

Kulpa also warned that the Russian government’s policy of subsidising its agricultural producers, which it is doing to disrupt Europe’s agricultural market, might affect Kazakhstan too.

“It is only a question of time,” he said.

Russia has been dumping its wheat on the European market to create tensions between Ukraine and the EU. With Ukraine being a major wheat producer, wheat exports are one of the “structural” issues in the question of Ukraine’s possible joining the EU, Kulpa explained.

The EU countries depending on Russian wheat exports will have to choose between Ukraine, as a candidate for EU membership, and “greed”, i.e. “cheap Russian wheat subsidised through the blood of Ukrainian people”, Kulpa said.

Coupled with the high fuel prices and the new EU green deal regulations, Russia’s policy has dealt a serious blow to the European farming industry, hence the recent farmers’ protests across Europe, Kulpa said.

Russia might use same the dumping policies against Kazakhstan, Kulpa said.

“The only difference is that European farmers can come out and protest, block roads, and stop it. In Kazakhstan they can’t do that. They will simply go bankrupt.”

Kulpa said Kazakhstan cannot do anything to stop Russia from using it for its economic purposes, because Russia has “many levers it can use to crush” it.

However, Russia’s economy is getting weaker because it is “wasting” its resources on the war. It is at the same time getting increasingly more dependent on China, Kulpa said.

Russia, which has already lost 50 percent of its military power, will in the future become “an economic backyard, with an increasingly North-Korean style of rule”.

Russia will “undoubtedly” lose the war, and the post-war situation will create new opportunities for Kazakhstan, Kulpa said.

“Many factors are going to work in favour of Kazakhstan.”

The situation will represent a chance for Central Asia to expand its sovereignty because it will create space for the deeper political, cultural and humanitarian presence of other powers, for example Turkey, and politically for the US and European Union, Kulpa said.

Once Russia’s “imperialistic pressure” is gone, in order to develop Kazakhstan will also have to reform its own inefficient political system, Kulpa added.

Kulpa also predicted Russia’s eventual collapse, because structurally it is turning into a new Soviet Union – “a new monster created by the Russian special services”.

“And the new monster has fallen into the same trap that the Soviet Union fell into,” Kulpa said.

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