The West tries to woo Central Asia, but will it work? [Video]

Russia Today’s website ran a very interesting piece for the West to completely ignore. However, they ought not ignore it because it outlines the American hegemony’ plan to disrupt yet more of the world, and to try to hurt Russia at the same time.

Let’s take the first excerpt, just to set the table:

In the first half of 2023, both the European Union and the United States were noticeably active in Central Asia – which is regarded by some as Russia’s “soft underbelly.” Many Western European and American politicians and diplomats frequented the region and attempted to pull the ex-Soviet republics of Kazakhstan, Tajikistan, Uzbekistan, Kyrgyzstan, and Turkmenistan over to their side in the ongoing conflict with Moscow.

The West wants to convince those states to support sanctions on Russia and block parallel imports to the country. It has promised compensation for financial losses. Moreover, Western European leaders see the likes of Kazakhstan as a source of natural resources that could potentially replace Moscow.

With all this recent attention, Central Asia is becoming increasingly aware of its own political importance – but will this lead it to break ties with Russia, as the West hopes?

The Western reader needs to understand what is taking place here. While the RT piece does go into this matter in quite a bit of detail, we can break it down succinctly here.

At issue is the practice of “parallel imports.” This is a neat workaround that Russia legalized and then put into wide use after the Special Military Operation began. As is widely known, when the SMO started, the reaction of the collective West was to try to punish Russia by cutting off all commerce with the country: Europe swore off Russian oil and gas, so did the United States, and there was a huge and likely unprecedented bandwagon effect as Corporate America and Corporate Europe widely stopped sales of their wares to the Russian markets. Companies like Apple, Nike, Levi Strauss, many other fashion outlets, internet businesses and so on – all stopped sending their products to the Russian market. Really.

No more of our stuff for you, you filthy Russkies! Because your Putin invaded Ukraine, no more iPhones for you! No more Levis Jeans for you! No more Coca-Cola!!! No more McDonalds for you!! BAD RUSSIANS!!! BAD RUSSIANS!!

End of story, right?

No.

As shown here, Coca-Cola is still on the shelves. Its popularity appears to have dropped, but the supply is still present and being replenished. iPhones are still available here, and fully current with the US market, sometimes even at prices matching or slightly under the American market prices. This has been attributed to over shipments and it is probably also a response to ruble valuation changes, especially recently as the ruble has been slowly slipping against the dollar. Not only are iPhones available here, but immediately after Apple released its new generation of Mac Studio and Mac Pro computers, they began showing up for sale on Russian sites. Levi Strauss is doing wonderful business here as always…

Oh, and by the way, Russia is still selling oil and gas to the West…

All of this has to do with how it is done, and that is where parallel imports come in to the story.

A parallel import scheme is when a distributor in a given country, like Kazakhstan, for example, buys American products for its consumers, but buys an excess quantity, because that excess is then sold and sent to a country which is officially being sanctioned.

In other words, a Kazakh store orders 3000 iPhones, stocks itself with 500, then sells the other 2500 to a Russian supplier. Since the two countries have friendly relations, there is no shipping problem, and bingo! iPhones for Russians (Russians love iPhones!), at a great price, too.

Not only have the imports restarted under the parallel scheme, but many shops in Russia also simply closed, then reincorporated – with new names, but still selling the brands they are known for.

The monikers and logos are just similar enough to transmit the message to the customers – get your stuff here, we still sell it! 

RT’s piece notes that America got wise to this, and now they are trying to stop it, but knowing evil American elite hegemon people, it isn’t about just stopping a semi-shady business practice. It is about gaining power and control all the more, further surrounding and isolating the Russian Federation. That is the serious aspect of this effort by the Americans to woo nations like Kazakhstan, Kyrgyzstan and other nations who participate in parallel import chains to Russia. The RT piece states it very well, I have only added emphases:

…Interaction between Washington and Central Asia mainly occurs within the framework of the “C5+1” format. It originated in 2015, when former US Secretary of State John Kerry launched a dialogue at the level of the foreign ministers of five Central Asian countries and Washington. Since then, meetings between the US State Department and these countries have been held annually.

The purpose of this cooperation is no secret to anyone. From the project’s earliest days, pro-Western media in Kazakhstan admitted that it is “more of a ‘1 + C5’ format” and is “another structure proposed by an external player seeking to bring the Central Asian states under its orbit of influence.”

But why have contacts between the West and Central Asia become so frequent and regular recently?

Old ties, new goals

After the start of Russia’s military offensive in Ukraine in February of last year, the US and the EU introduced several packages of sanctions against Moscow, including restrictions on the import of hundreds of goods from Western countries. In response to the restrictions, the Russian authorities legalized parallel imports – i.e., without the permission of the trademark owner. Such trade from Russia’s neighboring countries increased a hundredfold and by the end of last year, 2.4 million tons of goods worth over $20 billion had been brought into the country using this mechanism.

According to Kazakhstan’s edition of Forbes, exports from the country to Russia rose by 25% last year compared to 2021. The Financial Times indicates that the number of washing machines exported from Kazakhstan to Russia rose from zero in 2021 to 100,000 in 2022. The export of computer equipment, monitors, and projectors amounted to $375.4 million, and shipments increased more than 400 times over the past year, a Kazakh journalist reported.

At the end of April, speaking at an exhibition in the capital of Uzbekistan, Russian Minister of Industry and Trade Denis Manturov noted that the trade turnover between Russia and Central Asia had increased by 15% last year and amounted to over $42 billion. Central Asia is one of the world’s leading regions when it comes to the growth of trade with Russia. For example, trade turnover with Uzbekistan has grown by more than 25%.

It is impossible to say that this growth is only due to parallel imports. However, such a surge has never been observed previously.

Wink, wink! Nudge, nudge… say… no… more…

Except that we must.

Central Asian nations hold a unique position in the whole East-West struggle. They have largely positioned themselves as neutral; friendly to both sides. For example Kazakhstan is the launch site nation for all of Russia’s manned spaceflights, owing to its history of doing so as a Soviet Socialist Republic. However, this is also an easy destination for American and Western astronauts to go for ride-sharing on Russian Soyuz launch vehicles. The capital city, Astana is apparently a brand new city, and it caters to Americans and Russians alike with the best of the best made available to visitors, from what I observe here in Moscow. As an independent state, it has been developing at a very rapid pace. I am actually going to Astana in about ten days, and I will report on what I see there, but all indications show that this is a new nation, under tremendous development.

Kazakhstan’s relationships with both Russia and the West serve to benefit Kazakhstan itself, and while they are likely to field US hegemon visitation (why not? Let’s see if they have anything for us!), one must ask if they are really likely to cast off Russia for any reason.

Kazakhstan is just one such player. Another that I have been working with directly is Uzbekistan, through a project I am cooperating on with an educational institution there. One of the key indicators of the attitude that may be quite prevalent in Central Asia was stated this way by a participant in the project:

I am sure that these projects will not end here… All of this has a very favorable effect on our cultural climate and our economic climate, because globalization as an idea is the desire of people to be together, to be without any visible distances or barriers, to exchange experiences, and together, to create something new – this idea is magnificent, beautiful and brilliant! …We must provide indisputable evidence of the presence of a flourishing cultural life in Tashkent, and in Uzbekistan as a whole.  This will create new prospects for further revival of our national culture. And in summary, this is a story – and a beautiful one at that! – I hope that it remains in our hearts for a very long time!

While I personally found myself cringing at the stated notion that “globalization is good”, the context was understandable. For our friend, lowering borders and barriers is a good thing, and to the extent that he talks about this, he is right. It is only when globalization becomes the New Religion of One World (which must of course be run by somebody utterly unqualified to do so), that it becomes what we in the West and those in Russia and China, India and Africa, are increasingly sick and tired of.

While our friend’s response is quite emotional, this very factor also needs to be taken into account. This person was concerned for the development of his country’s cultural life and its recognition in the world. It came about as the result of a project undertaken with Russia, but our project is international in scope, encompassing East and West as only the fine arts can. It seems here that such an attitude is loath to sanction or shun anyone, because to do so would harm Uzbekistan’s own development, which is what seems central to this person who commented above.

To further that point, we look at the kicker in the RT piece that describes the “promise and the poker”, a.k.a. the carrot-and-stick approach:

In the summer and fall of last year, the EU repeatedly offered to compensate the trade losses of certain countries (including in the Central Asia region) and invited them to support sanctions on Russia. But in recent months, Brussels’ most substantial offer amounted to a proposed investment of €20 million ($22 million) for building satellite ground stations. Moreover, this May, instead of offering to make up for broken trade ties with Russia, the EU had only more threats for the refusal to follow US and EU sanctions against Moscow.

The US has been even more active in using its ‘stick.’ Back in April, its Department of Commerce imposed export restrictions against companies from Russia, China, Uzbekistan, Armenia, and other countries “for trying to evade export control[s]” and purchasing American goods for the needs of Russia. Following this, the European Commission also proposed sanctions against companies from several countries, including two Uzbek and one Armenian, for supplying dual-use items.

The efforts of the EU and the US have partially influenced Kazakhstan, which has introduced several bans on parallel imports. In April, to avoid secondary sanctions, Astana launched a tracking system for all goods brought in and out of the country. This has also complicated deliveries from Uzbekistan to Russia, since the cargo travels via Kazakhstan. As a result, supply chains are moving to Kyrgyzstan, China, and the UAE, and the cost of the affected imported products in Russia may increase by 10-12%.

The old carrot-and-stick approach is ancient but effective. But is it always?

Will it be this time?

This is the question. As can be seen here, the response of some parallel importers is simply to shift their transportation and supply streams, and where China is involved, all bets are off. The very idea that the West would be able to put any kind of sanctions on China for parallel importing that China would actually pay attention to these days is amusing, to say the least.

What is more likely to happen along the current trajectory of US domination ploys is that further economic and political power will be aggregated to China, who will be seen (and act as) the big-brother nation protecting all commerce in the Eastern Hemisphere.

The American imperialist urge (I never imagined myself saying that!! but it is essentially true…), that is to say, the wish of the American power elite to control the rest of the world seems to increase by the day.

However, the fatigue that the rest of the world has about this pushing also increases by the day. As our commenter from Uzbekistan reveals, the idea of shared commerce (a.k.a. “globalism”) is a good thing. But that perspective is shaped by how the needs of one’s own nation are met. The West are good salesmen; this fact cannot be ignored. But with many “third-world” countries emerging now into real leaders on the world stage, it may also be the case that these “new states” will play the middle ground, rightly seeing to their own needs first before accommodating the wishes of any great power, be it the USA, Russia, or China.

It is further true that of the current Big Three, the US is the most petulant, and its efforts to use carrot-and-stick imperialism are not likely to give the success today that they accomplished thirty years ago.

We will have to wait and see what happens.