Sanctions and trade wars take centre stage at Astana forum

The Western policy of sanctions against Russia is not without criticism, particularly in central Asia, according to high-level speakers at the inaugural Astana International Forum (AIF), which opened on Thursday (8 June) in the Kazakh capital.

As diplomats explained, the AIF is an upgrade of the Astana Economic Forum, held yearly since 2008. The name change reflects the broader range of topics discussed at the new forum, such as climate, food and energy security, and its ambition to bring attendees from around the world.

More importantly, the AIF is held in the context of the ongoing Russian aggression against Ukraine, while Kazakhstan, which has strong ties with Moscow, maintains a policy of neutrality.

In his address at the plenary session, Kazakh President Kassym-Jomart Tokayev described the current era as “a period of unprecedented geopolitical tensions” characterised by the “process of destroying the very foundation of the world order that has been built since the founding of the United Nations.”

He said the global system must work for all, bringing peace and prosperity to the many, not to the few.

In Tokayev’s words, these confrontations include sanctions and trade wars, targeted debt policies, reduced access or exclusion from financing, and investment screening.

“Together, these factors are gradually undermining the foundation upon which rests the global peace and prosperity of recent decades: free trade, global investment, innovation, and fair competition”, Tokayev said.

This, in his word, turns into “existential threats”.

“All this comes at precisely the moment when we urgently need to be focusing on the existential threat of climate change”, Tokayev said.

‘Fragmentation’

IMF chief Kristalina Georgieva, who was one of the high-level speakers alongside leaders of UN agencies and heads of state from the region, focused on the “fragmentation” of world trade, which she said was responsible for the world economy’s grim outlook.

She warned against turning to political alliances rather than economic logic, adding that what worried her the most was that “we collectively are acting allowing the forces of fragmentation to damage the prospects for economic recovery”.

Georgieva has previously warned against “fragmentation” due to a combination of the COVID-19 pandemic, the war in Ukraine, the push of leading economies to reduce dependency on China and shortcomings with globalisation that had led to a potentially dangerous splintering.

“If we allow trade into separate blocks, the cost to the world will be as high as 7% of global GDP, which is equivalent to wiping off the economies of Germany and Japan”, she said.

Georgieva complimented Kazakhstan, saying that the country demonstrated the “power of transformation”, which achieved “breathtaking” results since it gained its independence more than 30 years ago.

She said she had earlier in the morning notified Tokayev that IMF had upgraded growth projections for Kazakhstan by half a percentage point, reaching 5% this year. In contrast, global growth was slowing down to just 2.8%.

Thierry de Montbrial, executive chairman of the French Institute of International Relations, also focused on the consequences of the Western policy of sanctions in the long term.

“We are weaponising trade without realising that this will have long-term consequences”, he said, adding that the West had “lost the ability to think strategically”.

The two EU weapons

He said the EU had “only two weapons”: sanctions against its detractors and promises for enlargement for its closest allies. But he said both were equally inadequate, given the risk that if fulfilled, the enlargement promise could lead the EU “to its collapse”.

Among the speakers on the first day of the conference, only former EU Commission chief José Manuel Barroso dared to defend the EU sanctions as an adequate reaction of the Western community.

In Astana, EURACTIV spoke to EU diplomats who positively assessed Kazakhstan’s efforts not to be used as a territory for circumventing Western sanctions imposed on Russia, despite the close relationship with its neighbour.

Reportedly a visit of the International Special Envoy for the Implementation of EU Sanctions David O’Sullivan to Astana on 24-25 April, which had included officials from the US, had been met with a lot of “interest” from the Kazakh side, both at the official and business level.

According to sources, the EU explained the need to stop exporting “battlefield goods” via Kazakhstan and provided Astana with a list of these goods.

Reportedly, Astana was aware of the risk that Western governments would simply ask their respective companies not to export to Kazakhstan if such exports persisted.

EU diplomats had also reportedly scrutinised participants of the Astana forum, as initially, there had been concerns that Russians appearing on Western sanctions lists could attend. In fact, no high-profile Russians participated in the conference.

One diplomat said that Kazakhstan was simply very good at taking international space freed by Russia, and this conference was already replacing the once-famous St. Petersburg Economic Forum.

[Edited by Alice Taylor]

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