Kazakhstan: U.S. Interest in Global Hub on the Caspian

With a languid seaside vibe and camels roaming the outskirts of town, Aktau today hardly feels like a hub of global transportation and trade. But if the government of Kazakhstan gets its way, this port city on the Caspian Sea will eventually become a busy crossroads of Europe-Asia transcontinental commerce.

Until recently, Aktau didn't even exist. The Soviet Union founded it in 1961, calling it Shevchenko, after a 19th-century Ukrainian poet who was exiled near here. Shevchenko was a center for uranium mining, and far from being a transit hub, it was designated a "closed city" by the Soviets. There wasn't—and still isn't—any passenger train service here.

The collapse of the Soviet Union not only opened up Aktau, but also the entire former southern border of the USSR. The EU, the Asian Development Bank, China and the U.S. have all sought to capitalize on these newly opened borders by developing ambitious plans to stimulate transportation and trade between Europe and Asia via Central Asia. And Kazakhstan, hoping to get in on the action, is placing its bets on Aktau.

The government has set up a "special economic zone" at Aktau's seaport, with low tax rates for businesses located there. It has made plans for a massive expansion of the city, a development called "Aktau City" that is supposed to extend for miles from the current northern edge of the city. It's improving rail links south to Turkmenistan and Iran and north to Russia, and expanding the capacity of the seaport and airport. Aktau is also the main base for the country's nascent navy, which recently took delivery of its first proper warship, a missile boat called the "Kazakhstan."

And for Kazakhstan's leaders, the U.S. is a key to jumpstarting Aktau's development. Faced with massive logistical headaches inherent in fighting a war in distant, landlocked Afghanistan, the Pentagon has set up a series of transport routes through Central Asia and is looking to expand them. In addition, as it looks for a way to stabilize Afghanistan after it starts pulling out in 2014, the U.S. State Department has pledged to set up a "New Silk Road" of transcontinental transit that will center around Afghanistan.

Kazakhstan is positioning Aktau to take advantage of both those U.S. priorities, as a node on the military transport network and on the future New Silk Road. The U.S. already ships military cargo through Aktau, but Kazakhstan is proposing a substantial expansion of that transit, which will in turn help Aktau develop its port, said Birzhan Keneshev, deputy governor of the Mangystau region (which includes Aktau), in an interview. "This is a good opportunity for the U.S. military to send goods through our seaport and airport. We will get good experience in organizing multi-modal transportation businesses, which we have not had until now in Kazakhstan," Keneshev said. "It's a good way to set up some joint ventures with the American side, with logistics companies, and get this experience."

Kazakhstan also has attempted to dovetail its plans for Aktau with the U.S.'s vision of the New Silk Road. American diplomats, promoting the New Silk Road, frequently quote Prime Minister Manmohan Singh of India saying "I dream of a day, while retaining our respective identities, one can have breakfast in Amritsar, lunch in Lahore, and dinner in Kabul." Kazakhstan's ambassador in Washington, Erlan Idrissov, has adapted that phrase on a transcontinental scale, imagining a day when one can have "breakfast in Amritsar, lunch in Aktau and dinner in Dusseldorf."

Neither the U.S. or Kazakhstan governments are commenting publicly on their negotiations over this new cooperation. In a statement, the Ministry of Foreign Affairs said: "Kazakhstan is ready to contribute to implementing the [New Silk Road] initiative in the form of some new projects. One of them is the Transportation and Logistics Center (TLC) in Aktau Sea Port."

The U.S. has long seen potential in Aktau, even before the development of the Afghan transit routes. One 2009 diplomatic cable released by Wikileaks was titled "THE STRATEGIC IMPORTANCE OF AKTAU SEA PORT." Another, from 2008, compared Aktau's role on the New Silk Road to that of Samarkand on the original Silk Road: "Aktau is still a sleepy town...Its growth potential, however, is significant...The Kazakhstanis see Aktau as a potential "capital city" of the Caspian region, the central point for transportation, regional educational cooperation, and even tourism. If the cross-Caspian route is the new Silk Road for Central Asia, Aktau may yet prove to be its Samarkhand."

The U.S. has already provided aid to Kazakhstan's navy in Aktau, donating coast guard vessels and renovating facilities for the new naval academy. It has also shipped over 15,000 containers of cargo to Afghanistan via Aktau, the majority of military cargo that enters Afghanistan from the north.

U.S. Army Col. Robert Timm, defense attache at the embassy in Kazakhstan, acknowledged that the Pentagon was interested in expanding its activity in Aktau. "We're eager to talk to any governments in the region about options and opportunities that increase access for U.S. and allied throughput into and out of Afghanistan, and that would include Aktau," he said in an interview. "They have a plan to develop this multi-modal transit hub out there...Insofar as the development of that creates opportunities for us, we're interested in looking at that."

Aktau's growth into a global trade hub is far from a sure thing. It's not clear whether the U.S. is serious about its New Silk Road strategy, or if it is merely a rhetorical tool to make it look like Washington isn't simply abandoning Afghanistan. The government in Kazakhstan also is fond of proposing grand schemes, on which follow-through can be lacking.

At the edge of what is supposed to be Aktau City stands a monument commemorating President Nursultan Nazabayev's ribbon-cutting of the project. But the monument is dated 2007, and the subsequent financial crisis slowed down Aktau City's construction: there is still almost nothing there, and even the monument is crumbling, large tiles already having fallen off.

The gulf between the government's lofty rhetoric and Kazakhstan's often difficult reality was perhaps illustrated most vividly in the nearby oil town of Zhanaozen, where in December labor protests erupted into violence which left 17 dead, according to official figures. The episode has for the first time exposed the government's vulnerability to social discontent and highlighted the fragility of its ambitious development schemes. Trials of both protesters and police are currently ongoing in Aktau.