Thursday, July 16, 2015

Kazakhstan Shows What Russia Could have Done But Hasn't, Inozemtsev Says

Paul Goble

            Staunton, July 16 – Moscow media are talking about BRICS and the Shanghai Cooperation Organization in grand terms, focusing on Russia’s turn away from the West to China, but they are neglecting what may be the most important country in this region –Kazakhstan – which is on its way to becoming “a new Singapore,” Vladislav Inozemtsev says.

            In today’s “Vedomosti,” the director of the Moscow Center for Research on Post-Industrial Society argues that Kazakhstan may not yet be an Asian tiger, but it has chosen “an optimal path” for an oil-rich former Soviet republic to a modern and “dynamically developing” economy (

            Kazakhstan, he says, “is not Singapore, but neither is Russia. And therefore [its] experience is essentially for important for [Russia] than is that of Singapore itself.”  Indeed, he suggests, Kazakhstan offers “seven basic lessons” for Russia, lessons which Moscow has so far failed to heed.

            First of all, Inozemtsev says, “Kazakhstan like Russia is a country with a raw materials economy,” and also like Russia, Kazakhstan stressed the development of this advantage. But in contrast to Russia, Kazakhstan opened itself to foreign investment, and now has benefitted from the fact that it receives 10.5 times as much such investment from China alone as does Russia.

            Second, unlike Russia, Kazakhstan defined its development strategy not only in quantitative terms but in qualitative ones. Instead of simply seeking to boost its numbers in competition with the West, as Russia has, Kazakhstan has sought to rise through the ranks by changing itself and its economy.

            Third, in contrast to Russia which has sought to jump from a supplier of raw materials to an information economy, Kazakhstan has chosen “the only possible gradual path.” It has developed its raw materials sector, then it has been carrying out modern industrialization, and only then has it begun to think about moving toward an innovation-based economy.

            That has led it to focus on boosting investment generally and in infrastructure in particular, guaranteeing that each step forward Kazakhstan takes will have the support it needs. Russia has ignored that requirement, and consequently, many of its effort to jump ahead have fallen short or failed utterly.

            Fourth, although Kazakhstan has not yet created a knowledge economy, the Moscow analyst continues, it has focused on making investments in education and scientific research – while Russia has cut back on both thus undermining further its future possibilities – and it has integrated into the international scientific community rather than isolating itself.

            Fifth, and again in contrast to Russia, Kazakhstan has organized its finances on the basis of an understanding that it should not tax the extraction or export of raw materials in a way that does not guarantee foreign firms the kind of profits they need to operate. Such firms are invariably more interested in such profits than in new offices in the center of Moscow.

            Sixth, Inozemtsev says, “Kazakhstan has for a long time followed a course which Russia is still not even willing to think about, a course of careful cooperation with a whole range” of countries which are “bigger players than it is.”  Moscow looks now at Washington, then at Europe and at Beijing. But Astana tries to develop relations with all of them at once.

             And seventh, Kazakhstan has acted on its geopolitical possibilities, building highways, pipelines and railways between east and west and north and south even while most people in Russia talk in grandiose terms about becoming “a bridge between Europe and Asia.” 

            All seven of these principles have not yet transformed Kazakhstan into “’a new Singapore,’” but it is obvious that “the southern neighbor of Russia is an example of a new young state” which has the chance to become one, something that can’t be said of most of the other post-Soviet states and certainly can’t be said of Russia itself.

            Russia still hasn’t devoted “sufficient attention to its southern neighbor,” Inozemtsev says. Instead, it looks only at the already great countries and thinks it will thus be in a position to teach lesser ones.  That approach has failed: Today, Russia despite all its raw materials exports less than industrialized Singapore.

            When will Kazakhstan “surpass” Russia?  No one can say, Inozemtsev says; but the fact that one can even ask that question now highlights Russia’s continuing failure to learn from Kazakhstan.

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