Jewish American Heritage Month

Posted By admin on January 11, 2022

Israeli leaders are likely looking at the unrest and power struggles in Kazakhstan with trepidation.

Although the Central Asian republic rarely enters the public discourse and ties seem so marginal that there are no direct flights between the two countries, Kazakhstan is an important source for imported oil and a lucrative market for Israeli arms. Both businesses are shrouded in secrecy but are strategically important, say experts.

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Israel doesnt release information on where it sources its imported oil, but the financial reports of Israels two big refiners cite the Black and Caspian seas, through which Kazakhstan and other Central Asian producers ship their petroleum to Mediterranean markets.

Gabriel Mitchell, a policy fellow at Mitvim the Israeli Institute for Regional Foreign Policies, estimates that perhaps 10 to 20 percent of Israels imported oil comes from Kazakhstan, and there were times when it reached 25 percent.

If were talking about Israels relations with Kazakhstan and the other Central Asian republics, the entry point for bilateral relations has been through energy, says Mitchell, adding, Start with oil thats the only way to start.

With 30 billion barrels of oil reserves, the worlds 12th biggest, Kazakhstan is a major exporter to much of the world. As a result, the current unrest in the country where over 160 demonstrators were reportedly killed in a week of protests that marked the worst scenes since the former Soviet republic gained independence 30 years ago has sent world oil prices higher amid reports of temporary disruptions. But even if supplies are cut, Israel should be able to buy oil elsewhere, Mitchell says, given the world glut.

Arms sales to Kazakhstan are relatively small, but they are significant. Though it buys less weaponry than neighboring Azerbaijan, Kazakhstans energy wealth gives it money to spend. Israel and Kazakhstan signed a defense agreement in 2014, whose particulars have never been revealed but appear to deal mainly with weapons sales. Unlike Azerbaijan and Turkmenistan, Kazakhstan doesnt border on Iran and therefore has less strategic importance to Israel.

All of Israels big defense companies have sold products to Kazakhstans armed forces and police, including drones, precision rockets, radar systems and communications equipment. Last May, a factory and service center run by Kazakhstan Aviation Industry began producing unmanned aerial vehicles under license from Israels Elbit Systems.

Kazakhstan has also emerged as a market for cybersecurity tools most notoriously those of the NSO Group, the embattled maker of spyware technology. Last month, a forensic analysis by Amnesty Internationals Security Lab found that the cellphones of at least four activists critical of the government in Kazakhstan were found to be infected with NSO software.

Two other Israel companies, Verint Systems and Nice in the past at least have sold monitoring systems to Central Asian security agencies, including Kazakhstans.

Always problematic given Kazakhstans autocratic regime and poor record on human rights, the arms and cybersecurity sales may now put Israel in an especially embarrassing position as its technology is at risk of being used against protesters. Besides monitoring equipment, Beit Alfa Technologies, which belongs to the kibbutz of the same name, reportedly sold Kazakhstan 17 riot-control vehicles a decade ago.

Russian role

Faced with protests against a friendly regime and a violent crackdown by the Kazakh government, Jerusalem has chosen to lay low.

The only official response from Israel since the unrest exploded was a neutral statement from the Foreign Ministry issued last Friday, saying it was look[ing] forward to the restoration of stability and calm in Kazakhstan soon.

Israel is engaged in a difficult balancing act in Central Asia, where it is trying to square its national security and economic interests with the complicated politics of the region, Mitchell says. Russias presence adds another complication.

Kazakhstan has traditionally sought to play off Russia, China and the United States against each other. But some observers warn that Russias central role in sending in peacekeeping troops to Kazakhstan last week, under the banner of the Collective Security Treaty Organization, may begin a new era in which Kazakhstan is more tightly bound to Moscow.

Mitchell believes Israel would look askance at such a development. While Israel has a relationship with Russia, Israel doesnt see Russia as a partner. The partnership between Russia and Israel is only circumstantial, based on common interests, he says. From a geographical perspective, if Russia makes a move into a space, its not in Israels interest. That can be said about Kazakhstan as well.

But Alex Melikishvili, a principal country risk analyst for Central Asia at IHS Markit, thinks Kazakhstan President Kassym-Jomart Tokayev aims to keep Russia at arms length. Kazakhstan has always been firmly anchored in the Russian sphere of influence, he says. But this superficial deployment of the Collective Security Treaty Organization is just that extremely superficial.

Despite the harsh crackdown he ordered against protests, Tokayev may be looking at the unrest as a wake-up call for liberalizing the regime. This is a chance for President Tokayev to introduce much-needed political reforms, Melikishvili says. If there is no liberalization of the political system, we will witness more devastating and organized political unrest with far-reaching consequences, he adds.

Kevjn Lim, IHS Markits Middle East principal country risk analyst, says that, diplomatically speaking, Kazakhstan needs Israel less than in the past. In the 1990s, Israel played an important role for the newly independent countrys efforts to establish itself in the world community due to Jerusalems strong ties with the United States and the perceived power of the Jewish lobby and business.

For Israel, on the other hand, the Abraham Accords may have eclipsed Central Asia in media prominence and salience as Israeli-friendly Muslim countries, but certainly not in intrinsic strategic importance, Kim argues. Kazakhstan and especially Azerbaijan remain the twin anchors of Israeli engagement within the former Soviet Unions Muslim space, he says.

Dashed expectations help explain why Israel has never developed broader commercial ties with Kazakhstan.

In the years after the two countries established diplomatic ties in 1992, many Israeli businessmen most notably Shaul Eisenberg through the Israel Corp. hunted for deals, only to meet with corruption and limited opportunities.

Meanwhile, Kazakhstans early ambitions to diversify away from oil, in which Israel could have played a part by deploying agricultural and other technologies, largely failed. According to International Monetary Fund figures, two-way trade between the countries was about $370 million last year, down from $1.6 billion in 2014, with the lions share of that presumably oil.

Daniel Tartakovski, executive director of the Kazakhstani-Israeli Business Association, estimates there are about 140 companies involving Israelis registered in Kazakhstan, engaged mainly in agriculture, pharmaceuticals, energy and construction. He puts Israeli investment in the country at some $220 million.

Immediately after the collapse of the Soviet Union, the market was not saturated and therefore the 1990s were a good time for quick business, fast deals with good and comparatively easy high-yield earnings, Tartakovski states in an email. Today, Kazakhstan is an established competitive market that requires long-term investment, heavy local presence and hard day-to-day work for those willing to be successful.

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Oil, cyber and weapons: Inside Israel's relationship with Kazakhstan - Haaretz

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