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Inland Water Transportation in Kazakhstan

Kazakhstan’s inland waterways run to 4,302 km with an infrastructure that includes inland ports in Atyrau and Pavlodar, along with small cargo wharves and docks with access roads and ferry lines. Inland navigation is concentrated in the Ural-Caspian, Ili-Balkhash, and Irtysh river basins, and the Irtysh River is navigated via three locks at Bukhtarma, Ust-Kamenogorsk, and Shulbinsk. As such, Kazakhstan's inland waterways have great potential. Transporting cargo and passengers by ship is cheaper and more environmentally friendly than overland alternatives and has a significant multiplier effect on the development of recreation and tourism in surrounding areas. However, there are a number of challenges to realizing this potential, including the unsatisfactory condition of navigable routes, an insufficient amount and high wear of coastal infrastructure, the state of the inland fleet and waterway locks, and a shortage of specialists. Over time, the Kazakh government's lack of proper attention to developing inland waterways has translated into falling transportation volumes along the country’s main navigable rivers. In turn, the lower handling volumes have led to a dearth of funds to update and repair port facilities, along with a deterioration of coastal infrastructure on navigable waterways, industrial ships, and waterway locks. In the last five years, Kazakhstan’s inland waterway fleet has decreased from 171 to 150 vessels. Meanwhile, 70% of those in operation are past their service life, while the existing coastal infrastructure is unable to process modern types of cargo at the pace required by the market. As reported by Kazakhstan’s statistics agency, in the first half of 2024, 156,300 tons of cargo and 74,200 passengers travelled on inland waterways, down 40.8% and 40.1%, respectively, from the same period last year. A key problem lies in the lack of a comprehensive analysis of the classification and volume of cargo carried through inland waterways. Current developments in shipping are focused around the Irtysh, home to the inland fleet and the main cargo base from which crushed stone is exported to Russia. On the Russian side, plans are in place to further increase shipped imports of both stone and other inert materials, alongside a proposal to import timber to Kazakhstan from Khanty-Mansiysk. The shipment of petroleum products to Chinese refineries from Kazakh and Russian plants is also being explored in tandem with the Chinese side sending back construction materials and consumer goods. At the initial stage, the volume of cargo transportation along the Irtysh is estimated at 350,000-400,000 tons a year, which could be ramped up to 1.5 million tons in the future. Experts note the important role of a strategic task set by the government to develop the transit logistics of integrating inland waterways into the multimodal logistics chain. This is especially relevant amid congestion on Kazakhstan’s railways and roads, the gravitation of export-import cargo to the transport system, and energetic discussions on developing the Russia-Kazakhstan-China transit corridor using the Irtysh. The project entails shipping cargo via the river to Lake Zaysan where reloaded onto trains, it continues its journey through a new Maykapshagay–Jeminay border...

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SCO and Afghanistan on the Cusp of a New Relationship

The hype surrounding the recent summit of the Shanghai Cooperation Organization Council of Heads of State in Astana has died down, and the expert community has offered differing takeaways, with some experts optimistic and others cautious. Few, however, have considered what new this summit delivered on Afghanistan. In general, what is the role of the Shanghai Cooperation Organization (SCO) in resolving the political issues around long-suffering Afghanistan and rebuilding its economy? Despite the SCO’s previous hands-off approach to Afghan affairs, the issue of Taliban-ruled Afghanistan was raised for the first time at the highest level of the SCO in Astana, which gives hope that the organization will expand its role. In their remarks, almost every SCO head of state touched on Afghanistan in essentially the same vein, stating the need for peace, stability and security, while underlining the fact that Afghanistan is an integral part of Central Asia. Indeed, Afghanistan was mentioned in the final declaration of the Astana summit, with Member States “reaffirming their commitment to asserting Afghanistan as an independent, neutral and peaceful state free from terrorism, war, and narcotic drugs [and voicing] their readiness to support the international community’s efforts to facilitate peace and development in that country.” At the same time, there was a clear message to the Taliban that “the establishment of an inclusive government involving multiple representatives of all ethnic and political groups of Afghan society is the only way toward attaining lasting peace and stability in that country.” These statements represent a rather big step, considering that previously the SCO failed to find a consensus on Afghanistan and develop its own mechanisms to interact with Kabul. The creation of the SCO-Afghanistan Contact Group back in 2005 was rather a spontaneous reaction to the US-led coalition's Operation Enduring Freedom in the wake of the 9/11 terrorist attack. The SCO itself says the contact group was created because of the "concerns of the SCO countries about the negative development of the situation in Afghanistan and the intention of the SCO to establish a specific consultative dialogue with Kabul." While the contact group included the members’ permanent representatives to the SCO, only a few events were ever held. Indeed, interest in the contact group was only really apparent from the Afghan side, which was looking for SCO assistance in rebuilding the Afghan economy and SCO participation in implementing various energy and transport infrastructure projects and creating favorable conditions for Afghan goods to access the markets of SCO countries. However, none of this was realized. The SCO states preferred, as they still do, to conduct relations with Afghanistan bilaterally, and did not support the efforts of the SCO Secretariat to intensify the work of the contact group. In 2010, Uzbekistan directly indicated its interest in building relations with Afghanistan exclusively on a bilateral basis and stated that it would no longer take part in the contact group. In June 2012, Afghanistan’s application for SCO observer status was granted. Yet this step was more symbolic and failed to...

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SCO Summit: A Battle for Influence in Central Asia

For Central Asian countries, the Shanghai Cooperation Organization (SCO) is a tool that allows them to improve their position in the global arena, and develop closer economic ties with other members of the world’s largest multilateral group. But for Russia and China, the SCO is an instrument that gives them an opportunity to strengthen their influence in the strategically important region of Central Asia. Last week, the SCO (whose members are Russia, China, India, Iran, Kyrgyzstan, Kazakhstan, Pakistan, Tajikistan, Uzbekistan, as well as Belarus, the entrant at the meeting in Astana on July 3-4) held the summit of the Council of Heads of State of the SCO in the Kazakh capital of Astana where its leaders adopted a series of documents – from the Astana Declaration, underscoring the organization’s role in bolstering global peace, security and stability, through the SCO Development Strategy until 2035, to the group’s Economic Development Strategy’s Action Plan until 2030. Prior to the meeting of what is often described as “the world’s least known and least analyzed” multilateral group, Kazakhstan’s President Kassym-Jomart Tokayev repeatedly stated that, over the past 20 years it was not possible to implement a single major economic project under the auspices of the SCO. Indeed, ever since its foundation in 2001, the SCO has mostly been focusing on security issues, and during the summit in Astana security was yet again at the top of the agenda. But as the largest Central Asian nation’s Deputy Foreign Minister Roman Vassilenko told me at the briefing with the foreign journalists on July 4, SCO members still work more on a bilateral rather than on a multilateral basis. In his view, advancing economic cooperation within the organization of very diverse nations is not an easy task. Quite aware of that, China seeks to strengthen its economic presence in Central Asia through other formats such as the Belt and Road Initiative, and the China-plus-Central Asia format. In the past, Beijing was actively pushing for closer economic integration between SCO members, but Russia reportedly blocked Chinese initiatives. As a result, the People’s Republic began to sign bilateral agreements with regional countries, aiming to strengthen its role in Central Asia. Kazakhstan, as the region’s largest economy, is no exception. Despite being a Russian ally in the Collective Security Treaty Organization (CSTO), and a member of the Russian-led Eurasian Economic Union, Astana seems to see Beijing, rather than Moscow, as the de facto leader of the SCO. As Vassilenko stressed, out of 10,000 people who came to Astana for the summit, more than half of them were Chinese, which indicates that the SCO holds a huge importance in Beijing’s foreign policy. Moreover, Chinese President Xi Jinping seems to have received a warmer welcome in the Kazakh capital than Russian leader Vladimir Putin or the heads of states of other SCO members. At the airport, where Xi was welcomed by his Kazakh counterpart Kassym-Jomart Tokayev, a group of Kazakh children sang the song "Ode to the Motherland" in Chinese, while Chinese...

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Two-Dimensional Outlook Characterizes Western Media Response to SCO Summit

The Western media’s binary response to the latest Shanghai Cooperation Organization (SCO) summit in Astana creates an unnecessary – and perhaps unintentional – “us-versus-them” dichotomy. Characterizing the SCO as the “anti-NATO” alliance where China, Russia and Iran come together, this style of coverage makes no mention of the evident efforts of the majority of post-Soviet states to balance Russia’s decades-long influence in the region. It is also notable that the same outlets serving up this black and white coverage are not even in attendance at the summit, preferring to take aim from abroad. Central Asian states cannot escape the realities of their geography and have to largely rely on Russia and China for their economic prosperity. At the same time, their future independence requires that they are a respected part of the international rules-based order as well as on their increased contribution to global supply chains. Kazakhstan’s recent democratic reforms are in direct contrast to the authoritarian image cast on so-called “anti-NATO” countries. Armenia has announced plans to quit Russia’s Collective Security Treaty Organization (CSTO) military alliance. Generally, the countries in the region have – with different degrees of enthusiasm – implemented a multi-vector foreign policy, including following international sanctions against Russia and issuing statements supporting the “territorial integrity of Ukraine.” Uzbekistan’s courts even went so far as to convict a citizen for joining Russian troops fighting in Ukraine. Those looking to force an antiquated one-size-fits-all Cold War paradigm on Central Asia will ultimately be frustrated. The ongoing SCO event in Astana is bringing together a mainly Eastern-centric group of leaders speaking about deeper cooperation among the Organization’s members. While the Western press may simply decry this gathering as anti-Western, the fact that Central Asia stood in support of international sanctions against Russia and stayed neutral in the conflict with Ukraine, much to the chagrin of Vladimir Putin and his retinue, shows the region holds more shades of grey than stark black and white. Central Asia cannot be expected to fall entirely into the orbit of Western or Eastern leaning powers. The region’s republics will, and should, aim to be aligned with both. Arguably, the West, Russia, and China may all be disappointed in the end, but that outcome may well be in the best interests of the Central Asian states.

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Central Asia’s Combined ‘Army of Turan’: Could a Hypothesis Become a Reality?

Kazakhstan will host the military exercise, "Birlestik-2024" in July of this year. Notably, this became known from the press service of the Ministry of Defense of Azerbaijan. The exercises will be jointly held by the Armed Forces of Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. It is a convenient occasion to refresh the topic of the 'Army of Turan', which is periodically raised by experts both in Central Asia and neighboring countries. The Army of Turan is a hypothetical military bloc of Turkic-speaking countries. Its ideas have become relevant in the context of global geopolitical turbulence. I hear the thunder of cannons... Most military analysts consider Azerbaijan to be Turkey's proxy in the South Caucasus. In general, Baku's rapprochement with the capitals of Turkic states (plus Dushanbe) meets Ankara's interests in creating a unified cultural and economic space: Turan. However, does the integration of Turkic states mean that they will eventually be able to create a NATO-style security pact in Central Asia? Such initiatives have resumed with renewed vigor after the end of the Azerbaijani-Armenian conflict, during which Turkey has shown the capability of its weapons. Indeed, in 2022, against the backdrop of the Russian invasion of Ukraine, Kazakhstan - the only country of the participants to share a land border with the Russian Federation - pondered how to protect itself from further expansion of the northern empire's borders. But in the run-up to the summer of 2024, fears have mostly subsided. Many were sobered by the obvious fact that loud declarations of assistance from strong states at best mean the delivery of obsolete weapons, but no more. At worst, your offender will be censured from high podiums, and you will be sympathized with. For example, Turkey, the most likely to defend Central Asia from outsider aggression, did not risk helping the Palestinians, its brothers in faith, and got away with accusing Israel of fascism. So, the 'Army of Turan' exists in the heads of fantasists and pan-Turkics, but in reality, something ordinary is going on — the arms trade. Let's see what the armies of the Central Asian republics are armed with, excluding Turkmenistan, which has declared neutrality. Tajikistan and Kyrgyzstan The most troublesome neighbors in the region have not been able to complete their border delimitation process. As a result, quarrels periodically erupt, in which border guards from both sides intervene, staging mini-warfare. The cause of discord is usually the same: water. The Tajik and Kyrgyz militaries gain some combat experience in these micro-quarrels. Despite or based on this experience, Dushanbe relies on agreements with other countries -- Russia, China, India, Iran, and CSTO partners -- for its defense capability. Tajikistan's armed forces number only 9,000 men. They have 38 tanks (T-62 and T-72 modifications), 114 armored vehicles (APCs, BMPs, BRDMs), 40 artillery systems, and several short- and medium-range air defense units. The Air Force has four Czechoslovakian L-39 Albatross, combat trainers. Kyrgyzstan does not have much more power in the number of its troops, at around...

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The Outlook for Kazakhstan’s Rail Network

As a core infrastructure industry, railways play a strategic role in Kazakhstan’s economy. Today, over 50% of freight in the country is transported by rail, while the figure for passengers is 15%. Kazakhstan’s favorable geographical position between the largest producer of goods in the world, Asia, and the largest consumer, Europe, is spurring the development of transit freight transport and related income. However, government regulations and imperfect reforms have failed to reverse a degradation of Kazakhstan’s rail infrastructure and solve its capacity shortage problems. The robust rail network created during the Soviet period for a single national economy turned out to be ineffective under the new conditions of market dynamics. The country’s railway infrastructure, while reaching almost every region in Kazakhstan, meets neither current nor possible future needs of freight owners and has already nearly reached its limit in terms of throughput and processing capacity. The national railway carrier of both passengers and freight, Kazakhstan Temir Zholy (KTZ), cannot provide by itself the financial resources and investments at the scale needed to meet current and future challenges. The national budget is also unlikely to allocate such funding. A lack of prompt, large-scale modernization of key areas of rail transport, however, may hurt the country's economy. Tentative sources of funding for improvements According to the Ministry of Transport’s plan for the modernization of rail infrastructure, 1,300 km of railway track is to be added by 2030, while 4,800 km of second track is to be constructed. The expected price tag for these additions is over $11 million. It is currently unclear where these funds will come from. There have been mentions of borrowing around $400,000 from the national pension fund. According to the Ministry of Transport’s modernization plan, private investments will also be a key source through public-private partnership projects (PPP). In recent years, state participation in financing the construction and reconstruction of sections of the rail network has been limited and paled in comparison to those involving road projects. As part of the Nurly Zhol (“Bright Path”) infrastructure initiative, $9.2 billion has been allocated for just two programs to develop roads versus only $16.1 million allocated for railways. Added to this is the involvement of KTZ in implementing major transport infrastructure projects – the Khorgos dry port, the Kuryk port ferry complex and more than 1,000 km of railway track built in recent years, among others – using borrowed funds. Thus, the company bears a considerable burden in terms of servicing and repaying loans already raised for these projects, which represent its long-term assets. Given this debt burden, it is clear that the rail industry remains underfunded. Tariffs present a further dilemma Across the world, funding for the development of main rail networks is typically allocated from the national budget. In many European countries, for example, government funding covers up to 97% of operating and capital costs of rail infrastructure. Besides direct subsidies from the state, other sources of funds for modernizing and renewing rail infrastructure include bond...