The war in Ukraine has underscored the challenge facing Central Asian states in choosing sides. For a considerable duration, Central Asian leaders have proudly touted their multi-vector foreign policy, emphasizing a balanced approach to engaging with international partners. However, it is one thing to proclaim this stance on the grand stage of the UN General Assembly, and quite another to confront the realities upon returning home.
The ongoing conflict in Ukraine has emerged as a litmus test for the multi-vector nature of Central Asian politics. Just last month, The Wall Street Journal published an article titled "Russia’s Backdoor for Battlefield Goods From China: Central Asia," arguing that trade routes from China through Central Asia have become crucial to Moscow's attempts to circumvent Western sanctions. The piece focused on dual-use goods, and its title resonates with the increasing calls among Western observers to impose secondary sanctions on states indirectly supporting Russia.
Indeed, as articulated by the EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, before the war, Central Asia found itself in relative obscurity, but now it is at the forefront of global attention. However, advocating for such sanctions is one thing when voiced from the comfort of DC or Brussels, and quite another when considered from the perspective of Bishkek or Astana.
The prevailing sentiment, and perhaps the reality, is that Western partners are geographically distant, often remembering the region only on occasion. In contrast, China and Russia, as significant neighbors, maintain a constant presence and watchful eye. China has solidified its position as the most influential economic player in the region, evident in trade and investment figures. Economically, China is the conspicuous elephant in the room that can no longer be ignored. However, Russia remains the region's most strategic partner, and thus, there is a reluctance to upset this significant neighbor, especially considering Russia's status as the largest external military force with military bases on the ground in the region.
When addressing the matter of parallel imports, it's essential to recognize that the issue is not as clear-cut as it may initially appear. Firstly, Central Asia is not the exclusive source of dual-use goods destined for Russia. These goods traverse not only through Central Asian countries but also through other nations such as the United Arab Emirates and Turkey. Moreover, China, being the largest exporter of goods directly to Russia, plays a significant role, with many products originating from China manufactured by major U.S. companies.
Secondly, Central Asian states are cautious about the potential risks associated with secondary sanctions. Regardless of their orientation towards Russia in foreign policy, leaders in the region are cognizant that Western sanctions could significantly impact local economies, leading to potential domestic instability—an outcome none of the leaders’ desire. Consequently, leaders in the region consistently emphasize publicly that they will adhere to the sanctions regime against Russia.
Even China is exercising caution in its support of Russia. For instance, in the past month, several of China's largest banks ceased conducting business with Russia. Notably, Chouzhou Commercial Bank, the Industrial and Commercial Bank of China, the China Construction Bank, and the Bank of China all took this step.
As of now, however, Central Asian states find themselves navigating uncharted waters. It is currently challenging to foresee the unfolding of the war in Ukraine and its potential impact on the region. Despite pessimistic predictions, economic growth in Central Asia remained relatively stable over the past year or two.
This resilience may be attributed to shifts in trade patterns, particularly as Russia faced restrictions in trading directly with Europe. Additionally, the migration flows from Russia could have played a role. Recent research conducted by the University of Central Asia (UCA) indicates that the increased inflow of remittances is highly likely associated with transfers from Russian residents. For example, in 2022, Central Asian countries experienced an unexpected influx of Russians, with rough estimates suggesting that 65,000 Russians relocated to Kyrgyzstan, 75,000-100,000 to Kazakhstan, and approximately 100,000 to Uzbekistan. These migrants brought with them financial resources, contributing to the economic growth of the region.
In essence, Central Asia may have inadvertently become an unexpected beneficiary of the war in Ukraine. Nevertheless, considerable risks persist. The countries in the region must consistently refine a delicate balance in their relationships with Russia, China, and the West. On one hand, Central Asia should be seen as a neutral zone adhering to the international financial regime. On the other hand, the leadership of the region cannot be perceived as anti-Russian in Moscow. Paradoxically, pressure on Russia in this context might work to Central Asia's advantage. The isolation of its close neighbors under sanctions is the last thing Russia needs at the moment.
Further, the enhanced global influence of China proves advantageous for Central Asia. Xi Jinping has successfully positioned China as a mediator, holding a role akin to peacemakers. He is portrayed as the key figure capable of engaging in discussions with Putin regarding peace in Ukraine. Consequently, China can facilitate political meetings both in the West and in Russia due to this strategic positioning.
In light of this, some observers argue that sanctioning China and its affiliated partners may be counterproductive, especially if China is actively contributing to the noble cause of fostering global peace. According to Aleksandr Gabuyev, this strategic positioning not only benefits China in its interactions with Western counterparts but also enhances its standing in the eyes of the developing world, including regions like Africa and Latin America. In these regions, China is perceived as the only member of the UN Security Council opposed to the war, distinguishing itself from other Council members.
That being said, when it comes down to it, Central Asia is unlikely to distance itself from Russia and China due to its geographical proximity and the already well-established ties between these nations. As Temur Umarov succinctly put it, "It is perceived as a fact in the region. Therefore, there won't be any groundbreaking shifts in relations with these two powers.” Instead, we can expect an augmentation of China's presence and a certain transformation in Russia's presence, but it will remain actively influential.
