New Kazakh Policy Limiting Defense Contracts to Domestic (read: non-Russian) Companies Is an Indicator of Russian-Kazakh Tensions

The relationship and alliance between Russia and Kazakhstan has been growing more complex in recent years, with Kazakhs seeking gradually to stake out a more independent path from Russia, protect its sovereignty and reduce its vulnerability to Russian meddling and pressure tactics.  To be sure, the country remains within Moscow‘s general orbit, as a member of the Collective Security Treaty Organization (CSTO) military bloc, the Eurasian Economic Union (EEU) and the Commonwealth of Independent States free trade bloc.

Several of the country‘s efforts in the economic and financial (E&F) domain, however, demonstrate growing friction in the relationship.  This has included: Kazakhstan‘s efforts to develop stronger ties to the European Union (its biggest trading partner), although short of the Association Agreement signed in 2014 by Georgia and Ukraine; its efforts to protect its E&F relationships with Ukraine and Turkey, over Russian objection, including circumventing Russian trade routes in order to do so; and developing an indigenous military industrial complex, whereas it has long depended on the Soviet Union and Russia to equip its military in the past.

This latter issue has flared up again recently, with Russia demanding consultations with Kazakh leadership as well as the Eurasian Economic Union (led by Russia) concerning new restrictions that Astana has imposed on government purchases of dual-use products and other aspects of its defense procurements.  The restriction reportedly implicates billions of dollars of sales for Russian military and other exporters to Kazakhstan.

The aforementioned E&F indicators point rather plainly to growing turbulence in this relationship.  They demonstrate Kazakh concern over its economy being overly exposed to Russian estrangement of Western as well as other of its trading partners (and overall faltering Russian economic performance).  They also demonstrate concern over Russia‘s ability to exert control and influence over their country‘s actions due to it not having sufficient independence in its military supply chain.

Kazakh ‘‘‘risk mitigation‘ efforts in the E&F domain, however, are angering the Kremlin, with an escalatory potential that could well be destabilizing to the traditional alliances in the region and create ripple effects with regard to tensions with Turkey, the Nagorno-Karabakh dispute, the simmering Ukrainian crisis and other security-related challenges in the region.