Guest Post: Will EurAsEC grow into Eurasian economic union?

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by Joshua Foust on 4/11/2012

The following is a guest post written by Azamat Seitov of the Regional Policy Foundation, It was originally published there.

The last of the EurAsEC summit in Moscow demonstrated that for all the optimistic public statements, the integration processes are not advancing well in practice.

It was predicted that the summit will announce the replacement EurAsEC with full fledged Eurasian Economic Union (EEU). However, the results of the summit were more than modest – comprehensive agreement on formation of EEU can be signed only by January 1, 2015.

Among the few documents signed during the Moscow summit, one can single out such agreements as the decision on launching the Eurasian Economic Commission, as well as the unification of the passport and customs control in the Customs Union (by contrast, during the previous summit there were signed about 20 documents).

Analyzing the results of the summit the editor in chief of the “VK” A.Vlasov said that “the contradictions between the three major players of the Customs Union and the EurAsEC have reached a new qualitative level, where most of the questions would not fit into the agreement circle.” According the member of the Scientific Council of the Moscow Carnegie Center A.Malashenko, “EurAsEC should be regarded as a kind of cocoon, from which something might come into the light, whereas the Eurasian Economic Union is so far nothing more than Russian-Kazakh bilateral relations.”

One of the main deterrents of the Eurasian economic integration, whichRussiaso desperately wants accelerate, is that the rest of the participants are not prepared for what might follow the economic union – political integration.

In this regard, it is worth to note the statement of Dmitry Medvedev, who said that the participants of summit had a productive, sometimes fairly sharp discussions on how to further promote integration processes. “In fact, this means that the summit was not meant to produce decisions, but to determine the position of the summit participants for the near future.

According to the “Kommersant” newspaper, one of the issues that caused controversy at the summit was about the authority of the EEU during conclusion of international agreements with third countries. Moscow believes that it is the prerogative of the Eurasian Supreme Economic Council, which consists of the heads of member-countries. Minsk for its part insisted that all contracts should be agreed at the national level (with preservation of the nation state’s right of veto). During the summit, Lukashenko also insisted that member states had the right to veto decisions of the future structure.

Astana is opposing the acceleration of conversion of the EurAsEC into the EEU referring to a number of unsolved technical issues. According to the expert of the Russian Institute of Strategic Studies D.Aleksandrov, Belarusis interested in the transformation of the EurAsEC, since Minsk is little connected with Kyrgyzstan and Tajikistan. In contrast to Minsk, Astana seeks to strengthen its ties with regional neighbors.

The presence of protest in Kazakhstan society is another reason of the cautious attitude of Astana towards accelerated integration. According to Kazakh economist M.Kairlenov, reducing volumes of tax revenues, poor performance of the private sector, which is main powerhouse of the job creation, demonstrate the signs of crisis inKazakhstan. “On the background of such a tense environment to integrate means to increase social tensions, since integration increases the vulnerability of the ordinary people», expert said.

At the same time, Russiais expected to continue its intensive push for EEU during the upcoming presidential term of Vladimir Putin. The realization of the idea of Eurasian Union is the centerpiece of Putin’s master plan to unite the efforts of the former Soviet republics to strengthen the Russian position in the geopolitical competition with the U.S., EU and China.

According to N.Kuzmin, the Kazakh political scientist and foreign policy expert, “the proclamation of the Eurasian Union is a campaign with a very powerful symbolic resource.”

Setting the 2015 as the deadline for the formation of the EEU, is possibly associated with the confidence of Moscow that by that time the United States will turn their attention to the Eurasia again, since towards that deadline Washington will be relieved from its commitments in Iraq and have significantly reduced the number of troops in Afghanistan, whereas the wave of “colored revolutions” in the Arab world will pass away. Therefore, by 2015, Washington will have both the military and diplomatic resources available to turn the attention to the Eurasian region. In addition, by that time the US will have the ballistic missile defense sites ready for deployment inCentral Europe.

The primary target of the Russian foreign policy within the Eurasian Union is Ukraine. As V.Tkachuk, the director general of Ukrainian Foundation for Democracy “People First” notes, “within the framework of establishment of the Eurasian Union Russia insists on the entry of Ukraine into the Customs Union. Moscow is closely interested in its resources, infrastructure and human capacity.” One of the main instruments of pressuring Ukraineis intensive Russian economic expansion and the threat of trade wars.

The Russian foreign policy drive might well be reflected on the other post-Soviet countries. At the EurAsEC summit Dmitry Medvedev said that the observer states (Armenia, Moldova and Ukraine) should be forewarned that in the event of their non-alignment with the Customs Union, they might face some difficulties. At the same time Russian bans on Ukrainian cheese imports was seen as an attempt to put pressure onKievto reach an agreement on closer integration. Active discussion of the possible ban on the supply of dried fruits from Azerbaijan, Uzbekistan and Tajikistan on the pages of Russian media is in fact a warning to the national elites of these countries about the consequences that they may face in case of not joining the integration process, led by Russia.

It’s no secret that the Central Asian direction has a special place in Moscow drive towards EEU. According to the findings of «Stratfor» (USA) analysts, Russia considers Central Asia as a strategic foothold. In their view, the Central Asian republics “play an important role for Russia as a defense against the Islamic world and Asia, as well as energy and economic partners.” Kyrgyz political scientist M.Sariev believes that “if Russia’s attempts to unite the CIS countries will fail, it would mean a serious blow for Russia and it risks becoming a backyard of Europe or raw material appendage ofChina.”

Experts suggest that Moscow’s push for acceleration and deepening of integration processes is associated with the desire to protect the Russian interests in the event of upcoming change of political elites inCentral Asia. In particular, Stratfor analysts wrote that “Russia’s goals in Kazakhstan is to continue the integration with the Central Asian country through common economic space and, eventually, through the Eurasian Union, to arrange the transfer of power so that the results were favorable to Russia … Nazarbayev’s departure from the political scene will create uncertainty and instability in the country – both in political and security field.”

The report of the RAND expert and analytical center (USA), which was prepared with the financial support of the military and the U.S. Air Force, stresses that Russian military and political pressure on the countries of the Central Asian region is based on Moscow’s desire to prevent the consolidation of U.S. military presence in the region on a sustained basis.

RAND analysts have expressed concern that Russia due to her increasing weakness and fear of completely loosing the influence, might seek to confirm the control over the region by force. In that case Moscow military pressure can trigger ethnic, religious and territorial conflict in the region.

To achieve the return of the post-Soviet countries into its orbit of influence, Moscow could use the existence of the so-called “pain points” in the Central Asian countries. As an external pretext one can use the chronic domestic instability inKyrgyzstan, which would allow disseminating the so-called “controlled chaos” into the adjacent territories. It is also possible to use the heartlands of the Central Asian countries. For example, in case of Tajikistan such a heartland is the eastern part of the country, specifically, the regions of the ​​Rasht valley, where, according to analysts of Stratfor, the Government of the Republic of Tajikistan has limited control.

The RAND analysts believe that if a conflict breaks out in the region, Russia will seek to play a key role in it and try to prevent external forces from participating in its resolution.

As a whole, Moscow continues its active foreign policy to promote the EEU, which will provide Russia not only geopolitical benefits (strengthening the status and international influence), but also the economic incentives in the form of expanding the map of investment opportunities in neighboring countries.

However, Moscow’s political ambitions are not supported by adequate technical basis, developed; the Customs Union still did not turn into the effective instrument that would allow negotiating effectively the schemes of multinational agreements.

In current setting, the formation of the Eurasian Economic Union would mean the reorientation of the economy of its members on Russia at the expense of their integration with the global markets.

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This post was written by...

– author of 1848 posts on 17_PersonNotFound.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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