Kazakhstan is where the Belt and Road Initiative has been launched. It provides an open and inclusive platform for international cooperation, and creates a favorable condition for promoting the diversified development of Kazakhstan. China and Kazakhstan have a great potential for cooperation. While focusing on its own development, China greatly cares and supports the development of the neighboring countries. The new model of economic development and international relations based on the BRI fully represents the concept of "a community with a shared future for mankind".
Author: Anton Bugayenko
Head of Chinese Studies Program at the Eurasian Association for International Studies in Kazakhstan
BRI – China’s Plan for a New World Order
The BRI is not a Chinese Marshall Plan or merely a foreign policy. In fact, through the Initiative, China has helped promote and construct the common development of neighboring countries.
Firstly, in the face of western hostility, the world development is increasingly in need of a friendly environment. Secondly, the crisis of the old-world order is now becoming apparent. Western countries, led by the United States, are rapidly destroying the world order that they themselves once created. At this time of crisis, the BRI could not be more relevant not just as a large-scale investment initiative, but also as an idea for a new equitable world order. At least that is how it looks to us developing countries; that is how we are increasingly aware of the importance of the Initiative.
The BRI initially rests on two great pillars:
The first pillar is the promotion of economic growth, which has been under scrutiny by observers, including investment, trade, ecosystem synergy, everything that can be called material, and actions designed to increase material prosperity.
In terms of international relations theory, the BRI is based on realism and neorealism, but the BRI could well be considered a liberal initiative. The BRI for ten years has been aimed at defending the principles of economic liberalism. In this regard, it can be said that China has tried by all means to defend the world order based on globalism that has existed since the late 1980s.
The second pillar is the impetus for a non-western world. By non-western world I mean the world majority that are the recipients of global capital investments. Among these countries, there are both winners and losers of globalization. What they have in common is that they have sacrificed their sovereignty for the sake of economic development. The interests of transnational capital have taken precedence over national interests. It is good when the two coincide, and these countries win; but often the national interests and the interests of global capital diverge. In the long run, this has led countries to blind submission to a single financial and political center in the West.
China has revolutionized this system twice:
The first time was when it did not completely follow this formula and not subordinate its national interests to the interests of global capital, beginning with the rejection of the Washington Consensus and ending with a divergence with the United States in the mid-2010s.
The second time was when it began to implement the BRI. Through the BRI, China has willingly or coincidently taken the idea outside the country. Firstly, credits being independent of the West created an alternative foundation. Secondly, China pursued its national interests. The important thing here is that the basic national interests of China and of many other countries coincide, i.e., primarily the maintenance of domestic stability, acceptable living conditions for the population, and the creation of conditions for the development of this population. Now I have briefly explained the basic pillars of the social contract between the state and the people.
So in this way, China has unwittingly created an alternative to the world order which the transnational companies ruled. This has seriously changed the picture of the world. The BRI has so far changed not so much the real balance of power as the construction of international relations. It has turned the point back to national interests and the interests of citizens.
I consider this the most important achievement of the BRI in terms of constructivism in international relations theory. China has created opportunities for serious changes in international relations. Naturally, the masters of the world order do not like it. But what is amazing is that in an attempt to punish China, Russia and other centers of power being independent of them, they start to destroy the world order created by them.
Oddly enough, this creates new opportunities for China to conduct the BRI. The BRI can now work to the full force of its second pillar—the reconstruction of the world order. The BRI can be the basis of a new world order that is more just and more inclusive. This is where new opportunities open up for countries like Kazakhstan. China, when building the world order, listens not only to other great powers, but also to small countries.
For Kazakhstan, apart from the economy, the second important interest in the BRI is to take part in the construction of a new world order. The minimum task for us here is to strive for the best possible conditions, and the maximum task is to become one of the countries representing the interests of small neutral countries and to form the rules of the game which will not infringe on our national interests. It is important for Kazakhstan to make sure that the external environment works for nation-building and does not hinder it.
Let me give a simple example: oil export. In the established western-centric system, revenues from the export of Kazakh oil rarely remained in Kazakhstan and worked for the national economy. Most often these revenues were transferred to the western financial system. The system proposed under the BRI has neither such mechanisms, nor, most importantly, the motivation to export capital to China. Thus, in a BRI-based system, we would be interested in investing inside the country rather than taking capital abroad. This is an important step toward the nationalization of our elites, and the interests of our elites will coincide with the national interests, not the interests of global capital. This is a big step forward in nation-building, which is very relevant for us young emerging nations.
Three Distinct Advantages: Kazakhstan
– the Beginning of the BRI
This year marks exactly 10 years since President Xi Jinping has proclaimed the BRI in Kazakhstan's capital Astana. It is no mere coincidence that Kazakhstan has been chosen to launch China's most important foreign-policy initiative. It should be noted that Kazakhstan is the most stable republic of the region, which has both political and economic potential to become a full-fledged partner of China in its new Initiative.
Highlighting the advantages of Kazakhstan in the following factors:
• Transformation opportunities. The vast territory of Kazakhstan allows projecting various transportation constructions with access to Russia, the Caspian Sea and the Caucasus, Iran and the Persian Gulf, Central Asian countries and India.
• Stable political situation. Unlike other Central Asian countries, Kazakhstan has been politically stable for many years.
• Favorable investment climate. Kazakhstan has started reforms aiming at creating conditions for attracting investors earlier than other Central Asian countries. Followed by all other countries of Central Asia along this path, the region has achieved recognition from world rating institutions.
From the starting of the BRI, Kazakhstan was singularized as a key element in the Initiative. The BRI proposed by China was expected in Kazakhstan and in the rest of the region, as for more than 20 years of cooperation with the countries of Central Asia, China had not presented any specific documents defining its foreign or economic strategy in relation to the region. In this regard, it is necessary to define its goals and objectives in the region in a conceptual way, and the BRI has just become such an initiative.
Benifits of the BRI for Kazakhstan
The Belt and Road Initiative has become a cornerstone of bilateral relations in recent years. The BRI was a natural evolutionary transition of the experience accumulated in the previous decades in bilateral relations into a new quality. The stage of the formation of independent countries in Central Asia and the opening of this post-Soviet region to China is over. It is necessary to build long-term relations on this foundation. At the same time, the BRI creates a new trend in China's regional policy, which in fact has become the doctrine of Chinese foreign policy in Central Asia. In essence, China’s presence in the region has a structured plan and a mission statement.
In general, the BRI has fulfilled its purpose, driving the relations of both Kazakhstan and other Central Asian countries with China to the next stage, from episodic relations to systemic contacts. Some consistency in political relations with China has emerged. Now the BRI is moving to the next stage: within the framework of the "5+1" initiative, a mechanism for China's interaction with the entire region is being created at once. This meets the trend of the region's integration.
Kazakh-Chinese interaction receives a new impetus due to new challenges within the BRI. As a result, the cooperation today covers a huge number of projects in the real sector of economy; industrial facilities are designed and built; hydro-technical utilities are built and modernized with the assistance of China.
Kazakhstan is pursuing a policy of industrialization. At the same time, the Kazakhstani government has adopted a national program of industrialization, namely Nurly Zhol. Under the influence of the Initiative, this program has been adjusted.
• Industrial modernization
China has become the largest foreign investor in Kazakhstan's manufacturing industry. More importantly, Chinese companies are often the only significant investors in the region. In a country like Kazakhstan, it often lacks new breakthrough projects. Chinese investment projects involve the construction or deep modernization of enterprises and the creation of new jobs. Kazakhstan perceives the "Belt and Road" transportation infrastructure as a chance to diversify its economy and create new opportunities for its development.
Despite the difficulties in implementing the projects, Kazakhstan has still managed to shift the vector of Chinese investment toward manufacturing. Before the BRI there was no investment in Chinese manufacturing at all. Now, more than $2 billion has been accumulated by Chinese companies in Kazakhstan's manufacturing industry.
Kazakhstan's dividends from participation in the Initiative are an increase in economic diversification, by promoting the share of the manufacturing industry and the diversification of Kazakhstan's exports through the supply of non-oil goods to the large Chinese market–from rolled metal and ore to agricultural products.
Within several years, the enterprises will be built and modernized with the assistance of large Chinese companies in the territory of Kazakhstan, in such spheres as chemical industry, mining and metallurgical sector, machinery, infrastructure, energy, agro-industrial complex, light industry, refining, production of building materials and information technologies.
• Development of all regions of Kazakhstan
New enterprises will be established almost in all regions of Kazakhstan. A large number of projects will be implemented in the North Kazakhstan region, East Kazakhstan region, Almaty region and South Kazakhstan region.
The established enterprises are directed on the creation of additional workplaces for Kazakhstani people, and also on the development of industrial and production potential of the country. Kazakhstan should be integrated in the global chains of production and the distribution of goods and services. Due to the implementation of these investment projects with China, the task of industrialization of the country is greatly simplified.
• Development of transportation infrastructure
It is important to note that besides the expansion of production, the construction of new transportation routes is foreseen. The new construction on the vast territory of Kazakhstan and the modernization of the old ones fully meet the interests of the Republic.
High technology has significantly reduced the distance between the ports of the Pacific Ocean and European countries through the ground corridors. The transportation through overland routes allows reducing the travel time almost twice. Given this, China emphasizes cooperation with our country which has a unique location. Nurly Zhol Infrastructure Program is aimed at the formation of new transportation routes connecting with China, Europe and the Persian Gulf. Large projects are already being implemented in this area.
In general, the participation of Kazakhstan in the BRI brings a number of key perspectives, including the development of transportation and industrial potential and the creative and modern solutions of social problems.