Six experts from the post-Soviet space weigh in on whether the ambitious integration project – the Eurasian Economic Union, which Russia relentlessly promotes – makes economic and political sense for their nations.
From left: Armenian President Serge Sarkisian, Belarus' President Alexander Lukashenko, Russian President Vladimir Putin, Kazakh President Nursultan Nazarbayev and Kyrgyz President Almazbek Atambayev attend final news conference after the Eurasian Economic Union summit in Moscow in December 2014. Photo: AP
In May 2015, Kyrgyzstan will join the Eurasian Economic Union (EAEC), which is currently comprised of Russia, Belarus, Kazakhstan and Armenia. The union itself became operational on January 1, 2015, and welcomed Armenia as the fourth member country one day later on January 2.
Tajikistan is also showing interest in the EAEC, and on December 10, during a meeting between the presidents of Russia and Uzbekistan in Tashkent, the parties expressed their desire to hold consultations on the creation of a free trade zone between Uzbekistan and the EAEC (although one month later President Islam Karimov stated that his country would not join the EAEC or any other organization reminiscent of the former Soviet Union). Today the EAEC unites 180 million people within a common market, making it the largest integration union in the world.
But anti-Russian sanctions and the economic slump in Russia have raised doubts in Kazakhstan and Belarus about the sustainability of the new union. In potential member countries, where prior to Russia’s crisis the arguments in favor of joining were overwhelming, the disputes between Moscow, Minsk and Astana over organizational mechanisms have prompted a new wave of discussion.
Below, Russia Direct presents the viewpoints of six leading experts from current and potential EAEC member states.
Daniyar Kosnazarov, head of the Central Asia and Caspian Geopolitics and Regional Studies Department under the Library of the First President of the Republic of Kazakhstan
The backlash over Moscow’s annexation of Crimea was the first serious test for the EAEC integration process. The divisions inside the EAEC in the wake of events in Ukraine and anti-Russian sanctions have strengthened Kazakhstan’s sense of sovereignty.
The measures being discussed in the country, which include banning the import of goods from Russia, show that each country in the EAEC intends to put its own interests first. Now is a natural “bedding-in” period and an opportunity to draw the boundaries of the union. Any integration project is a constant search for compromise, and for Kazakhstan the process is beneficial.
The EAEC can help solve Central Asia’s interregional problems. The resumption of supplies of Uzbek gas to southern Kyrgyzstan in late December 2014 after Russian President Vladimir Putin’s visit to Tashkent confirms Moscow’s constructive role as a “solicitor” between EAEC member countries.
The Central Asian republics are traversed by roads and pipelines connecting Europe and China. The discrepancies between the republics are hindering the implementation of Chinese projects in the region. Awareness of this should make the region’s politics more flexible and compromising. In other words, the principle of “don’t anger the Chinese” can simultaneously draw the republics closer together and determine the general prospects of the EAEC project.
Denis Melyantsov, senior analyst at the Belarusian Institute for Strategic Studies
For Minsk, the EAEC means access for Belarusian goods to the Russian market and the markets of Kazakhstan, Armenia and other potential members of the union. The EAEC can facilitate economic growth in Belarus. Another motive for Minsk’s integration with the EAEC is access to energy resources, the price of which is set to be the same for all participating countries.
In ratifying the EAEC, Belarus stated that it would comply with the obligations only if trade exemptions and restrictions were removed. The experience so far of EAEC integration shows that many obstacles need to be overcome, often artificial and politically motivated ones. If all trade restrictions are removed and movement of goods, capital, people and services within the EAEC becomes genuinely free, such integration will do doubt promote economic growth in member countries.
Tamerlan Ibraimov, director of the Bishkek Center of Political and Legal Studies
All the Central Asian republics have a large domestic market, which the EAEC can help to develop. But in any economic union, the winner is always the country where the economy is more developed and technology-savvy, and where production costs are lower. Those Central Asian countries able to compete with other members of the EAEC have a good chance of solving their problems through expanding their products and services markets. Uncompetitive countries, however, risk even worse economic hardship than before.
Economic interdependence inside the EAEC has yet to result in assistance for economically weaker members. On joining the union, Kyrgyzstan will be even less willing to shoulder responsibility for others’ economic weaknesses. There is debate in Bishkek about the requirement to share member countries’ politically induced economic woes.
As long as the risk of disintegration hangs in the air, and the economic benefits of membership remain unclear, any talk of the EAEC’s future must come with caveats. Much will depend on the ability of the most influential country, Russia, to take account of the economic and political interests of its fellow EAEC members.
Vagram Ter-Matevosyan, senior research associate of the National Academy of Sciences of the Republic of Armenia, Institute of Oriental Studies
Armenia was the first country where Russia applied the safety factor to keep it inside Moscow’s zone of influence. The reason for joining the EAEC lies in Armenia’s traditional security problems and complex regional surroundings.
The frequent violations of the ceasefire in the disputed region of Nagorno-Karabakh and on the Armenian-Azerbaijani border, coupled with Azerbaijan’s increased military spending in excess of Armenia’s national budget, have restricted our options.
Turkey’s refusal to establish diplomatic relations with Armenia and lift the blockade in place on Europe’s last remaining closed border (which is also a customs border of the EU), and Armenia’s exclusion from regional energy and communications projects, all played a part in the country’s decision to join the EAEC.
Armenia’s economic troubles were another reason for joining the EAEC. Yerevan was seeking a short-term and tangible opportunity to improve the country’s economy. The choice was made in favor of EAEC membership, which in contrast to the long-term benefits of the EU could help solve the economic problems in the short term.
The third reason was Yerevan’s dependence on Russian energy. Under the “assets for debt” scheme, a number of strategic assets in Armenia were transferred to Russian companies in lieu of $93 million owed to Russia. Armenia’s gas industry became the property of Gazprom. In exchange for control of the Armenian gas sector, Russia reduced gas prices from $270 per thousand cubic meters to $189.
A little known reason for Armenia’s predisposition to EAEC integration is the role played by Armenians in Russia. A large percentage (29 percent) of investors in the Armenian economy are members of Russia’s Armenian diaspora. But the economic slowdown in Russia is lowering demand for Armenian exports and migrant laborers.
Saodat Olimova, director of the Sharq Research Center, Tajikistan
The Eurasian space is a huge market in which Tajik products — fruit, vegetables, cotton, textiles, energy, non-ferrous and precious metals — are in high demand.
If the country joins the EAEC, economists and businessmen expect to see an influx of investment in the hydropower sector and lower prices on hydrocarbon imports from Russia and Kazakhstan.
Another benefit of EAEC membership for Tajikistan could also be the common labor market. Tajik migrants would be able to work in Russia free of the current immigration restrictions.
Tajikistan’s WTO membership would be a sticking point if it were to join the EAEC. The WTO forbids members from joining customs unions that include non-members of the organization without revising the terms of WTO membership. Integration into the EAEC may also restrict Tajikistan’s maneuverability on foreign policy in relations with the EU and the U.S.
On the other hand, the EAEC would be a counterweight to China, allowing Tajikistan to avoid excessive dependence on the economy of the “Celestial Empire.” In the ideal scenario, Tajikistan could become a gateway to the huge EAEC market for goods from China, India and Pakistan. It is not ruled out that inside the EAEC the country will become the principal model for CIS integration over the next decade.
Farhod Tolipov, director of the private think tank Caravan of Knowledge in Tashkent
Uzbekistan currently views the EAEC as politically motivated and is not looking to join the union. EAEC membership would require some major legislative changes that Tashkent cannot make at present. Another reason is that the country’s diversified foreign economic relations make it infeasible to adopt all the rules of the game as prescribed by the EAEC. But it should not be ruled out that Tashkent might just be waiting and watching to see how events unfold before making a final decision.
In my view, the issue of regional integration is of greater relevance to Central Asia. Pointing to the flimsiness of such integration, people cite the fact that the Central Asian republics have built different economic and political models. But if this assertion is correct, the differences will manifest themselves even more markedly within the EAEC. The organization will be hounded by crises in member countries with weak economies, but there will be no joint effort to help each other overcome the risks.
Generally speaking, there are two essential dimensions to the integration processes taking place in the post-Soviet space. The first is whether or not Russia can become the center of gravity of the former Soviet republics, and not just economically. The second pertains to the ability of the republics to make their own choices based on their national interests. The future of the EAEC depends on a combination of these two dimensions.