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Prognosis of the World Development between 2000 and 2030

Victor Feller
rostfond@nursat.kz

X. Russia And Kazakhstan In The 2010s.

In spite of both countries staking high on China in their foreign policy, they will still be looking like two Russian kniazi (feudal lords) from the times of Mongol occupation, when they used to go to the Mongol khan’s headquarters to squeal on their rivals. This "mutual love" will divide Russia and Kazakhstan off successfully, thus playing the game of the Chinese bogdykhan.

In the early 2000s, the construction of oil and gas pipelines from Western Kazakhstan to China will begin. During the work, the Chinese team will be heading on towards the Kazakh one, stringing electric power lines and highways along. Russia will support the cooperation, out of a quite reasonable - as well as naive - hope to share the benefits. The Russian government, as well as businessmen, will be even eager to contribute to the stock, so that Russian oil and gas could be piped through the network to China. Similar projects will be pursued in Siberia. Kazakhstan will try in vain to get itself invited to join the military cooperation between Russia and China, failing to endure the competition with Russia, rich in defense capacities. Finally, by the agency of the ever-perspicacious Chinese, Russia will be made to participate in several trilateral projects on the base of Kazakhstan’s defense industry.

The Chinese will get possession of several Kazakhstan’s large enterprises, thus receiving a springboard for reaching the Russian defense industry "from inside". Kazakhstan will begin construction of a large nuclear power plant. Russian and Kazakhstan universities will be packed with Chinese students. In contrast to Russia, in Kazakhstan there will be several higher educational establishments founded jointly by China and Kazakhstan or by China, Turkey and Kazakhstan, or even by China, Kazakhstan, and Pakistan.

The development of food processing industry in Kazakhstan will be hampered by quantities of cheap products flowing in from Russia and China. The redistribution of property and land will be still going on in Kazakhstan in 2005, impeding the industrial development, while the government will be engaged in large-scale programs of various kinds, leaving small and medium-sized businesses to the discretion of local authorities or merchants from abroad. A lot of Kazakhstan citizens will be working again on mines, metallurgical or chemical plants, at the roadwork, etc. Those basic industries will be the only ones to develop in Kazakhstan, meeting the needs of ravenous Chinese economy, as well as of local defense industry and Russian engineering.

Between 2000 and 2010, Kazakhstan will grow to be an "oil republic", an annex to both Russia and China. However, it will allow him take a major step forward in goods and oil transporting facilities. They will make the only developing branches of Kazakhstan industry, its agriculture remaining on a low level, processing industries gradually decaying, and the mainstream of investments - mostly state or state-guaranteed, rather than private, money - going into primary industries, or to metallurgical, chemical and nuclear power plants.

Similar to Kazakhstan, Russia will also be increasing her exports to China. However, it’s weapons, military technologies and engineering goods that will make most of her export, rather than raw materials or food. In Russia, small and medium-sized businesses will develop faster than those of Kazakhstan will, and in some years her goods will begin their triumphant progress over Eastern Europe, Turkey, China, and Central Asia.

Yet the triumph in Europe will result in trade barriers on the way to Central Asia and Kazakhstan. Russia will have to take this medicine, as by that time she will be too deeply engaged in joint projects of her oil, gas and energy being transported via Kazakhstan on to China. In reality this deadlock will be nothing else but another one of Chinese mousetraps, or rather Chinese puzzles that local lords, aspiring after favors of the Chinese bogdykhans, once had to find their way through.

So it will be only natural for relations between Russia and Kazakhstan to become gradually colder from the year 2005 on. However, it will not harm various transit projects, which will be finished, for the most part, by the end of the decade.

By that time Kazakhstan’s system of compulsory education will be for a great deal adapted to fit the Chinese model. Thousands of the Chinese will be coming to study in Kazakhstan, and thousands of Kazakhs will enter Chinese universities. In Northern Kazakhstan, many companies founded solely by the Chinese will appear. The Chinese will start growing crops in Kazakhstan, and by the end of the decade there will be several dozens of thousands (100-150 thousand) of mixed Chinese-Kazakh families in Kazakhstan. Kazakh youths will strive to be assimilated into the prestige Chinese culture. The Chinese government will do much to make Kazakhs and nations close to them feel themselves a part of the Chinese world, investing vast amounts of money into the construction of the "friendship centers", restoration of ancient monuments of Kazakhstan and development of the "Great Silk Road" tourist route. A great deal of Chinese Kazakhs will be working in Kazakhstan, as well as lots of citizens of Kazakhstan will be coming to work in China. At the same time much will be done to prevent Kazakhs from associating with the Uigurs.

Quick expansion of mining, metallurgy, and chemistry, intensive development of road network, investments into pipelines and rail transport will instantly call forth the development of correspondent engineering branches, such as factories producing spare parts, repair shops etc. Kazakhstan will be attracting investments from Russia, China, Turkey, Japan, Germany, and Eastern Europe, encouraging domestic companies to invest as well. However, beginning from 2010, economic conditions will be worsening, with inefficient courts, corruption and monopolies driving investors out of the country.

As for Russia, it’s the Volga region, Orenburg and Chelyabinsk oblasts that will be developing at the quickest pace at the beginning of the century, preserving balance between the "organic" and replacement growth. Their progress will trigger the economic revival of neighboring oblasts of Kazakhstan, making new efficient small and medium-sized companies appear in the transportation, engineering, metalworking, construction, and trade industries. Quick development of neighboring Russian regions will stimulate mining industry, but have negative effect on large metallurgical factories, as well as on local consumables and food-processing industries, which Russians will drive out of the market. The progress of the Volga region will stimulate active migration to Russia.

In all, the competition with Russia will deepen the general decline of the frontier oblasts of Kazakhstan. To stop the process, after 2005 strict tariff and non-tariff regulations and trade barriers will be introduced; however, they will prove ineffective and even harmful, bankrupting the competitive abilities of the few Kazakh companies still able to compete. Productive forces of Western and Northern Kazakhstan will migrate into central regions, thus reputedly contributing to the consolidation of Kazakhstan. China will support the closing of the border between Kazakhstan and Russia, as it will help her stabilize her own zone of influence and make Kazakhstan export its cheap minerals to China instead of Russia.

By 2010, this goal will be achieved and central regions of Kazakhstan made stronger at the expense of the North and the West. By that time a strong domestic industry of consumer goods will develop in Kazakhstan. By that time advantages of transporting the Russian oil will be too evident to keep on with strict border regulations. Thus Kazakhstan will be moved to open its borders again. However, it will grow none the richer by this, as Russia will shortly reduce the volume of her cooperation with China, so that it’s only by 2030 that the amount of oil transported will reach figures, once estimated for 2015.

The implications of the above for Kazakhstan’s engineering companies are far from being bright. On present showing, they cannot be expecting even a kind of a "fairly-favored-industry" treatment. Relations between Russia and Kazakhstan will be confused and gradually worsening during all of the 2000s. Kazakhstan will develop its own oligarchic capitalism, oriented towards primary industries using mostly low technologies. The development of its northern and western parts will be too uneven, with mining and chemistry predominant. In contrast to the fast development rate of large companies, small and medium-sized businesses will probably be degrading, especially if they are engaged in farming or production of consumables. The only possibilities for them to get through could be winning favors of some of the large oil or gas companies or reaping benefits from Russia’s business boom. The inflow of foreign investments to Kazakhstan will probably cease or be limited by that time. As a poor compensation, flocks of hustlers seeking fortune will rush in instead. The outflow of population from Kazakhstan will remain considerable throughout the decade.

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© Dmitry Alemasov

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