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HOW SIGNIFICANT IS THE EURASIAN ECONOMIC UNION?
The Diplomat
June 4, 2014
Moscow's high hopes for the union have come up against reluctance
among its neighbors.
By Casey Michel for The Diplomat June 04, 2014
Last Thursday, the presidents of Kazakhstan, Russia, and Belarus met
in Astana to consecrate the founding of the Eurasian Economic Union
(EEU). Structured as the maturation of the current Customs Union
shared by the three states, and sold as the most substantive effort
to reintegrate the post-Soviet space to date, the gathering presented
the final step toward the creation of Russian President Vladimir
Putin's foremost geopolitical project.
The signing of the founding documents of the EEU - set to come into
force on January 1, 2015 - was marked by all of the attendant pomp
and ceremony that the post-Soviet space so well knows. Putin noted the
signing marked a new "epoch." Belarusian President Aleksandr Lukashenko
claimed the new union embodied "happiness." And Kazakhstan President
Nursultan Nazarbayev, who originally lobbied the idea of a Eurasian
Union over twenty years ago, termed the new grouping as a "blessing."
But where the rhetoric crafts the idea of a unified, complementary
front, numbers and trajectory present a far bleaker, far more strained
outlook for the EEU. While the union was never meant as a reimagined
Soviet Union, as some wrongheadedly posit, the EEU, with 170 million
member-citizens and a combined GDP of $2.7 trillion, also stands far
from the economic hegemon Nazarbayev would wish - or the neo-imperial
project Putin has imagined. Instead of presenting another geopolitical
"pole" or "link" between Europe and Asia, as Putin claimed in 2011, it
seems far likelier the EEU will morph into another diluted post-Soviet
assemblage, a far cry from the union's original proposition.
The most obvious factor weighing on the EEU stems from newfound
tensions between the Kazakhstani and Russian notions of the union's
potential. Where Putin and his Duma had wished for a common parliament,
common passport, and common currency within the EEU, Astana remained
steadfast in confining the organization to a purely economic union. As
Kazakhstan's lead negotiator pointedly observed on Thursday's signing,
"[The Eurasian Union] is a pragmatic means to get benefits. We don't
meddle into what Russia is doing politically, and they cannot tell us
what foreign policy to pursue." There would, it seems, be no better
indication of Kazakhstan's resolutions on limiting the EEU's outcome
than the fact that the final treaty signed ended up less than one
third of the length of the text originally proposed - with Kazakhstan
continually boasting along the way of its ability to hamper attempts
at political incorporation. Indeed, as seen in the Kazakhstani EEU
factsheet, Astana spent nearly as much text delineating what the EEU
was not as what the treaty actually was.
Such pushback arose in concert with increasing emphasis on maintaining
Kazakhstani sovereignty, which has only increased following Russia's
Crimean annexation. This reality is, in a sense, understandable.
Ethnic Russians still make up nearly a quarter of Kazakhstan's
population, and there is a discernible history of secessionist attempts
in northern Kazakhstan. It is no coincidence that, following the
Crimean annexation, Kazakhstan both eased the citizenship process for
ethnic Kazakhs and discussed increasing penalties for those calling
for separatism. Likewise, the EEU has sparked nationalistic protests
heretofore unseen in independent Kazakhstan - structured both around
economic concerns, as well as opposition to the resurgent imperialism
rising through Russia.
But it's not simply that the Kazakhs rightly fear territorial shifts.
The issues of the EEU - currently constructed to impose external
tariffs and swell intra-EEU trade - have thus far failed to present
the viable economic benefit intended within the current member-states,
a trend that would seem to only accelerate as integration continues.
The World Bank has noted the lack of wholesale long-term benefit
to union participants; the EU's Institute for Security Studies
has reiterated such findings. Russia's deputy finance minister has
noted that, under EEU structures, Russian subsidies of member-states
could explode to $30 billion annually, while, as Aitolkyn Kourmanova
relates, "Without direct subsidies, the Central Asian countries will
not perceive any significant advantage to integrating with the Union."
These concerns - the combination of economic and sovereign - are by no
means limited to Kazakhstan. Kyrgyzstan, a likely future member, has
seen numerous attempts at slowing the process of accession. Likewise,
Armenia, despite its reliance on Moscow's economic prop, has witnessed
substantive domestic pushback. And in a fascinating turn, Nazarbayev,
at last Thursday's signing, demanded that Armenia only be allowed to
accede to the EEU within its UN-recognized borders - that is, without
the disputed region of Nagorno-Karabakh alongside. As former Armenian
Foreign Minister Alexander Arzumanyan retorted, "How can Russia enter
the Eurasian Union with Crimea that has not been recognized by any
state, and Armenia is admitted only within the borders recognized by
the UN?"
Surging nationalism, brittle economics, a flaccid and faltering
Russian economy - these ingredients would be more than enough to
temper expectations about the EEU's potential. But two additional
factors stand to mitigate the EEU's prospects that much further.
The first is the Chinese presence, and the continued push within
Beijing's "March West" strategy. On the heels of President Xi Jinping's
whirlwind 2013 journey through Central Asia, which saw him expound
and expand upon his projected Silk Road Economic Belt, Xi gathered
regional heads in Shanghai for a recent Conference on Interaction and
Confidence Building Measures in Asia (CICA). In addition to backing
Russia into a gas deal slanted heavily toward Beijing, Xi cemented
economic and energy-based hegemony within the region. If, as Martha
Brill Olcott observed, Xi's 2013 swing presented a "victory lap" in
Central Asia, the recent gathering saw him accelerate Beijing's pace,
that much more to the detriment of Moscow's regional influence.
China has, thus far, remained largely quiet on the matter of the EEU -
and its silence is, if not resounding, then at least noteworthy.
According to Dr. Alexander Cooley, a political science professor at
Barnard College, "The Chinese have been very cautious - initially
they expressed support for [the EEU] and said it was compatible with
Chinese interests in the region, but now there are more critical
voices about its purpose and potential harmful effects on Chinese
economic interests and trade."
But where China, outside the EEU, will only continue to swell in
geopolitical import in Central Asia, it is the lack of a Ukrainian
presence in the EEU that presents the final, fatal strike against any
attempt to craft the union as the "pole" Putin originally desired. The
likelihood of Ukraine - with a market of nearly 50 million, and
industrial potential second only to Russia within the EEU roster -
joining the union remains next to nil, effectively neutering the
EEU's geopolitical consequence.
As it is, Ukraine's decision to forego EEU membership parallels its
prior decision to decline full membership within the Commonwealth of
Independent States, the most substantive prior attempt at post-Soviet
agglomeration. And in a unique twist of timing, just as Putin,
Nazarbayev, and Lukashenko gathered in Astana, Ukraine was going
through the final procedures of exiting the CIS permanently. Ukraine's
non-membership, which all but doomed the CIS to irrelevancy, looks to
repeat itself with the EEU. Despite Putin's aims, and incorporating
marked pushback from Kazakhstan, the EEU looks likely to stand as
but one more shallow, stilted attempt at post-Soviet integration.
Casey Michel is a postgraduate student at Columbia's Harriman
Institute, focusing on post-Soviet political development.
http://thediplomat.com/2014/06/how-significant-is-the-eurasian-economic-union/
From: Baghdasarian
The Diplomat
June 4, 2014
Moscow's high hopes for the union have come up against reluctance
among its neighbors.
By Casey Michel for The Diplomat June 04, 2014
Last Thursday, the presidents of Kazakhstan, Russia, and Belarus met
in Astana to consecrate the founding of the Eurasian Economic Union
(EEU). Structured as the maturation of the current Customs Union
shared by the three states, and sold as the most substantive effort
to reintegrate the post-Soviet space to date, the gathering presented
the final step toward the creation of Russian President Vladimir
Putin's foremost geopolitical project.
The signing of the founding documents of the EEU - set to come into
force on January 1, 2015 - was marked by all of the attendant pomp
and ceremony that the post-Soviet space so well knows. Putin noted the
signing marked a new "epoch." Belarusian President Aleksandr Lukashenko
claimed the new union embodied "happiness." And Kazakhstan President
Nursultan Nazarbayev, who originally lobbied the idea of a Eurasian
Union over twenty years ago, termed the new grouping as a "blessing."
But where the rhetoric crafts the idea of a unified, complementary
front, numbers and trajectory present a far bleaker, far more strained
outlook for the EEU. While the union was never meant as a reimagined
Soviet Union, as some wrongheadedly posit, the EEU, with 170 million
member-citizens and a combined GDP of $2.7 trillion, also stands far
from the economic hegemon Nazarbayev would wish - or the neo-imperial
project Putin has imagined. Instead of presenting another geopolitical
"pole" or "link" between Europe and Asia, as Putin claimed in 2011, it
seems far likelier the EEU will morph into another diluted post-Soviet
assemblage, a far cry from the union's original proposition.
The most obvious factor weighing on the EEU stems from newfound
tensions between the Kazakhstani and Russian notions of the union's
potential. Where Putin and his Duma had wished for a common parliament,
common passport, and common currency within the EEU, Astana remained
steadfast in confining the organization to a purely economic union. As
Kazakhstan's lead negotiator pointedly observed on Thursday's signing,
"[The Eurasian Union] is a pragmatic means to get benefits. We don't
meddle into what Russia is doing politically, and they cannot tell us
what foreign policy to pursue." There would, it seems, be no better
indication of Kazakhstan's resolutions on limiting the EEU's outcome
than the fact that the final treaty signed ended up less than one
third of the length of the text originally proposed - with Kazakhstan
continually boasting along the way of its ability to hamper attempts
at political incorporation. Indeed, as seen in the Kazakhstani EEU
factsheet, Astana spent nearly as much text delineating what the EEU
was not as what the treaty actually was.
Such pushback arose in concert with increasing emphasis on maintaining
Kazakhstani sovereignty, which has only increased following Russia's
Crimean annexation. This reality is, in a sense, understandable.
Ethnic Russians still make up nearly a quarter of Kazakhstan's
population, and there is a discernible history of secessionist attempts
in northern Kazakhstan. It is no coincidence that, following the
Crimean annexation, Kazakhstan both eased the citizenship process for
ethnic Kazakhs and discussed increasing penalties for those calling
for separatism. Likewise, the EEU has sparked nationalistic protests
heretofore unseen in independent Kazakhstan - structured both around
economic concerns, as well as opposition to the resurgent imperialism
rising through Russia.
But it's not simply that the Kazakhs rightly fear territorial shifts.
The issues of the EEU - currently constructed to impose external
tariffs and swell intra-EEU trade - have thus far failed to present
the viable economic benefit intended within the current member-states,
a trend that would seem to only accelerate as integration continues.
The World Bank has noted the lack of wholesale long-term benefit
to union participants; the EU's Institute for Security Studies
has reiterated such findings. Russia's deputy finance minister has
noted that, under EEU structures, Russian subsidies of member-states
could explode to $30 billion annually, while, as Aitolkyn Kourmanova
relates, "Without direct subsidies, the Central Asian countries will
not perceive any significant advantage to integrating with the Union."
These concerns - the combination of economic and sovereign - are by no
means limited to Kazakhstan. Kyrgyzstan, a likely future member, has
seen numerous attempts at slowing the process of accession. Likewise,
Armenia, despite its reliance on Moscow's economic prop, has witnessed
substantive domestic pushback. And in a fascinating turn, Nazarbayev,
at last Thursday's signing, demanded that Armenia only be allowed to
accede to the EEU within its UN-recognized borders - that is, without
the disputed region of Nagorno-Karabakh alongside. As former Armenian
Foreign Minister Alexander Arzumanyan retorted, "How can Russia enter
the Eurasian Union with Crimea that has not been recognized by any
state, and Armenia is admitted only within the borders recognized by
the UN?"
Surging nationalism, brittle economics, a flaccid and faltering
Russian economy - these ingredients would be more than enough to
temper expectations about the EEU's potential. But two additional
factors stand to mitigate the EEU's prospects that much further.
The first is the Chinese presence, and the continued push within
Beijing's "March West" strategy. On the heels of President Xi Jinping's
whirlwind 2013 journey through Central Asia, which saw him expound
and expand upon his projected Silk Road Economic Belt, Xi gathered
regional heads in Shanghai for a recent Conference on Interaction and
Confidence Building Measures in Asia (CICA). In addition to backing
Russia into a gas deal slanted heavily toward Beijing, Xi cemented
economic and energy-based hegemony within the region. If, as Martha
Brill Olcott observed, Xi's 2013 swing presented a "victory lap" in
Central Asia, the recent gathering saw him accelerate Beijing's pace,
that much more to the detriment of Moscow's regional influence.
China has, thus far, remained largely quiet on the matter of the EEU -
and its silence is, if not resounding, then at least noteworthy.
According to Dr. Alexander Cooley, a political science professor at
Barnard College, "The Chinese have been very cautious - initially
they expressed support for [the EEU] and said it was compatible with
Chinese interests in the region, but now there are more critical
voices about its purpose and potential harmful effects on Chinese
economic interests and trade."
But where China, outside the EEU, will only continue to swell in
geopolitical import in Central Asia, it is the lack of a Ukrainian
presence in the EEU that presents the final, fatal strike against any
attempt to craft the union as the "pole" Putin originally desired. The
likelihood of Ukraine - with a market of nearly 50 million, and
industrial potential second only to Russia within the EEU roster -
joining the union remains next to nil, effectively neutering the
EEU's geopolitical consequence.
As it is, Ukraine's decision to forego EEU membership parallels its
prior decision to decline full membership within the Commonwealth of
Independent States, the most substantive prior attempt at post-Soviet
agglomeration. And in a unique twist of timing, just as Putin,
Nazarbayev, and Lukashenko gathered in Astana, Ukraine was going
through the final procedures of exiting the CIS permanently. Ukraine's
non-membership, which all but doomed the CIS to irrelevancy, looks to
repeat itself with the EEU. Despite Putin's aims, and incorporating
marked pushback from Kazakhstan, the EEU looks likely to stand as
but one more shallow, stilted attempt at post-Soviet integration.
Casey Michel is a postgraduate student at Columbia's Harriman
Institute, focusing on post-Soviet political development.
http://thediplomat.com/2014/06/how-significant-is-the-eurasian-economic-union/
From: Baghdasarian