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Prime Minister Manmohan Singh’s Visit to Kazakhstan

Meena Singh Roy is Research Fellow at Manohar Parrikar Institute for Defence Studies and Analyses, New Delhi. Click here for detail profile.
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  • April 27, 2011

    Prime Minister Manmohan Singh paid an official visit to Kazakhstan on April 15-16 2011. The visit aimed at enhancing the strategic partnership launched during Kazakhstan President Nazarbayev’s visit to India in 2009, when he was the Chief Guest at the Republic Day celebrations. Diplomatic relations between the two countries were established in 1992 and since then they have developed and matured in a unique manner. India lays great emphasis on its relations with Kazakhstan, which is the second largest Republic of the former Soviet Union. There has been a high level of activity in the political cooperation between the two countries. The impetus for the bilateral relationship was provided during the visit of Prime Minister Narasimha Rao in 1993 and later during Prime Minister Atal Behari Vajpayee’s June 2002 visit to participate in the first Conference on Interaction and Confidence Building Measures in Asia (CICA) Summit.

    The recent visit of Dr. Manmohan Singh needs to be viewed in the context of regional developments in and around Central Asia, India’s growing energy needs, and Kazakhstan’s increasing role in the region and its immense hydrocarbon reserves. During the visit, seven bilateral agreements1 were signed in energy, IT, agriculture, civil matters and health.

    One of the most significant achievements of this visit was the signing of the “Joint Action Plan” on furthering the strategic partnership between the two countries. This plan provides a ‘Road Map’ for the period 2011-2014, to enhance bilateral cooperation in several areas -- hydrocarbons, civil nuclear energy, space, information technology and cyber security, high technology and innovative technology, pharmaceuticals, health care, agriculture and cultural exchanges.

    The strategic significance of Kazakhstan and its increasing role in the region and beyond makes it an important country for India in the Eurasian region to forge long term engagement with. Kazakhstan has successfully completed its chairmanship of the Organisation for Security and Cooperation in Europe (OSCE) in 2010. It also initiated the CICA, a Central Asian regional initiative, and the only Central Asian forum of which India is an active member. Kazakhstan organised the first ever CICA-OSCE forum in Istanbul in June 2010. In 2011, it will preside over the council of foreign ministers of the Organisation of Islamic Conference (OIC). It will also be hosting the next Shanghai Corporation Organisation (SCO) summit meeting in Astana as chair of the SCO.

    In addition, Kazakhstan has been contributing towards stability and peace in Afghanistan as well. During a recent address, President Nazarbayev announced his intention to convene this year a special donor conference on Afghanistan. Last year, Kazakhstan launched a special $50 million educational programme to train 1,000 Afghans in Kazakhstan and signed an agreement to send officers to the International Security Assistance Force (ISAF) headquarters in Kabul.2

    Kazakhstan is the most stable and growing economy in the region. Today, its international reserves stand at about US $60 billion. In 2010, its GDP increased by seven per cent, industrial production by 10 per cent and the growth in manufacturing industries reached 19 per cent. In 1994, Kazakhstan’s GDP per capita was slightly above $700.

    By January 1, 2011, this increased to $9,000. In the education sector, Kazakhstan takes the leading position among 129 countries. These indicators highlight the role that Kazakhstan is poised to play in the region and the strengths of its growing economy.3

    The second significant achievement of Dr. Singh’s visit was the signing of the agreement for cooperation in peaceful uses of atomic energy. It provides a legal framework for cooperation in fuel supply, nuclear medicine, use of radiation technologies for health care including isotopes, reactor safety mechanism, exchange of scientific and research information, exploration and joint mining of uranium, design, construction and operation of nuclear power plant. The agreement needs to be viewed in the context of India’s growing energy demands. According to India’s 12th Five Year Plan, nuclear power will play a major role in meeting the country’s energy needs. The country needs an additional 1,00,000 MW of power during the 12th plan (2012-17).4

    The most-awaited agreement on energy cooperation was also finalised during this visit. A package of three agreements - participating share assignment agreement, carry agreement and joint operation agreement -- on Satpayev exploration Block was signed between ONGC Videsh Ltd. and National Company “Kazmunaigas” (KMG). Satpayev Block is in the Caspian Sea covering an area of 1482 sq. km. The block contains two prospective structures - Satpayev and Satpayev Vostochni (East) with estimated hydrocarbon reserves of 256 million metric tonnes (MMT). In terms of its oil reserves, Kazakhstan, with an estimated 39.8 billion barrels, figures among the top ten countries of the world.

    India has been trying to gain a foothold in Kazakhstan’s hydrocarbon sector since 1995. But it was only in 2009 that the Heads of Agreement was signed between the OVL and the KMG. This was followed by an Exploration Contract between India’s Ministry of Oil and Gas and the KMG in 2010. And during Dr. Singh’s visit have come definitive agreements between the ONGC and the KMG. The latest agreement will assign 25 per cent participating interest in the Satpayev Block to OVL as a strategic foreign partner in the project. Thus, the agreement is the first breakthrough for India in the Central Asian energy sector. It will also help India diversify its oil acquisitions. India is currently dependent on West Asia and North Africa for 67 per cent of its oil imports. By 2025, India’s oil imports are likely to grow to 90 per cent of its requirements.

    In addition, a memorandum of understanding in the area of information security and an agreement between the agriculture and health ministries were also inked. India has also agreed to set up an Indian –Kazakhstan Centre of Excellence in Astana.

    Dr. Manmohan Singh’s visit can be considered a major way forward in India-Kazakhstan relations during which the main thrust has been given to cooperation in the field of hydrocarbons and peaceful use of nuclear energy and in finalising the joint action plan for future cooperation for the period of 2011-2014. Prime Minister Singh also acknowledged that “Kazakhstan is a very important and influential player in Central Asia” and India wants to develop this partnership in diverse fields.

    However, the two-way trade (which stood at $313.8 million in 2010) does not reflect the actual potential and remains the most unsatisfactory part of India’s relations with Kazakhstan. In terms of economic cooperation, only six Indian companies are accredited with Kazakhstan and nine joint ventures are registered. The low level of trade can be attributed to the lack of land connectivity. The implementation of the International North South Corridor will facilitate cheaper movement of goods. Some important areas for bilateral cooperation that can be explored are: commercial farming, information technology, nano-technology and banking, food processing industries, pharmaceuticals, and electronic goods. The potential for cooperation also lies in the export of industrial and agricultural products. India can also offer cooperation in satellite imagery and telecom modernisation. Considering the present level of industrialisation of CIS countries, Indian rather than Western technology may be more suitable for Kazakhstan. Besides, Kazakhstan offers prospects for import of raw wool by India.

    To fully actualise India’s potential to contribute for the development of Kazakhstan and Kazakhstan’s capability to provide the much-needed hydrocarbon resources for India, the current momentum of bilateral cooperation needs to be sustained in future. The effective implementation of the ‘Road Map’ crafted during this visit can take India-Kazakhstan relations to new heights in the coming years.