Academic journal article The Polish Quarterly of International Affairs

"Still-Born Giant:" How Russia's Faltering Economy Will Stifle the Eurasian "Economic" Union

Academic journal article The Polish Quarterly of International Affairs

"Still-Born Giant:" How Russia's Faltering Economy Will Stifle the Eurasian "Economic" Union

Article excerpt

The Eurasian integration project has been touted as the most important strand of Russia's foreign policy for the past four years. Since 2010, the idea of creating its own integration grouping has haunted Moscow's relations with the country's "Near Abroad," a Russian shorthand for those post-Soviet states in its neighbourhood that retain considerable economic and security dependence on Russia.

Most intergovernmental structures created after the fall of the Soviet Union lacked strong institutions to control adherence to commonlyagreed rules. The Commonwealth of Independent States (CIS) has been used as a vehicle of "civilised divorce," rather than an efficient integration project. The free-trade area created within CIS in 2011 was an attempt to give a tangible underpinning to this grouping, but the limitations of such a multilateral format became obvious when Russia resorted to frequent trade restrictions against other parties. That said, the CIS remains a loose formation of post-Soviet states, rather than an integration grouping based on legally-binding provisions.

Although the first idea of a Eurasian integration project was voiced by Kazakh president Nursultan Nazarbayev in 1994, Russian sponsored integration projects were revived after the 2008 financial crisis. The Customs Union of Russia, Belarus and Kazakhstan, established in 2010, was the first step towards the proclaimed economic reintegration of the post-Soviet space. In 2012, it was followed by the creation of the Common Economic Space (CES), a community of the same participants professing deeper economic integration beyond the customs area. The Customs Union and the Economic "space" would be regulated by the newly-established supranational authorities, a bi-cameral Eurasian Economic Commission and a community Court.

The next goal for the Kremlin was the establishment of the "Eurasian Economic Union" in 2015. According to Russia's Foreign Policy Concept, approved by President Vladimir Putin on 12 February 2013, "Russia considers it a priority to establish the Eurasian Economic Union in order to enact the mutually beneficial economic links on the CIS territory, ... and to become an integration model open to other CIS countries."

There are immediate questions which arise from this formulation of policy objectives. On the one hand it underscores economic interdependence among CIS Member States both, as a factual basis for its establishment and as a raison d'être for a future "economic union." On the other hand, it openly sets up an intention of including other CIS states into the grouping to enhance the previously three-party Customs Union.

Before Russia's intervention in Ukraine in 2014, this "expansive" aspect of the proposed economic union was meant to carry out the role of managing Russia's "near abroad." In his article, Russia's foreign minister Lavrov claimed that the Eurasian Economic Union would become "the unification model that will shape the future not only of our three countries, but also that of other post-Soviet nations."1 The exact form and impact of such "unification" was not defined.

Despite these ambitious declarations by Russia, some signs of tensions with Belarus and Kazakhstan regarding the treaty text have surfaced. According to the statement of the then Belarusian prime minister, Mikhail Myasnikovich2 at the Supreme Eurasian Economic Council in September 2013, the drafting of the proposed treaty was carried out with "difficulties." Later, Belarusian president Alexander Lukashenka threatened that Belarus could withdraw from the Customs Union if the current mechanisms of oil export duty distribution were not changed. Equally, signs of discontent have emerged in Kazakhstan. Representatives of the opposition Social Democratic Party suggested holding a national referendum on a range of issues, including Kazakhstan's entry to the Union.3

These developments exemplify the lingering uncertainties about the future outline of the Eurasian Economic Union, both in the current members and the potential members. …

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