EconoMonitor

Putin Declares ‘Eurasian Union’ Goal of Russian Foreign Policy

Author: Robert M. Cutler  ·   ·   › Share This Print

On October 4, Russia’s Prime Minister Vladimir Putin published an article in Izvestiia, “A New Integration Project for Eurasia – The Future Is Being Born Today,” that announces the initiative to create a supranational political structure on top of the CIS Customs Union in which Belarus and Kazakhstan participate along with Russia. While the prospects for its realization are cloudy at best, the declaration suggests a reorientation of Russian foreign policy strategy under soon-to-be-president Putin that will de-emphasize Europe and the West in general to the extent possible.

BACKGROUND: Throughout the 1990s in the post-Soviet jumble, continuing configurations and reconfigurations of integration and cooperation arrangements appeared on and disappeared from the scene, of which the Commonwealth of Independent States (CIS) is likely the best known. One of the other constellations that seemed to have some staying power was the so-called CIS Group of Four (Belarus, Kazakhstan, Kyrgyzstan, and Russia), which sought to align their economic and financial activities from relatively early on. However, the forced exit of the first three from the ruble zone in the fall of 1992 led to such a divergence of practice and of interests that any substantive cooperation proved impossible. The lack of institutionalization of state structures, particularly in Kazakhstan and Kyrgyzstan, did not help. Nevertheless, these four countries continued to seek to constitute an ad hoc customs union in the mid-1990s, and then a more formal limited-membership CIS Customs Union at the end of the decade. In the implementation of this they were perpetually unsuccessful, but the Group of Four plus Tajikistan became the basis for the formation of the Eurasian Economic Community (EurAsEC) in October 2000.

The EurAsEC appears to be more and more taking over economic functions of the CIS, at least on paper. Also, the trilateral Customs Union agreement established a EurAsEC court that the three members are supposed to use instead of the CIS Economic Court. The creation of EurAsEC, and then of the Customs Union inside it, represented the effective disappearance of the last Central Asian attempt at any relatively autonomous integration. As early as 1994 Kazakhstan, Kyrgyzstan, and Uzbekistan created the Central Asian Union (CAU) with political as well as economic goals. When Tajikistan joined the CAU in 1998, the organization changed its name to the Central Asian Economic Community (CAEC). In February 2002, with the addition of Uzbekistan, it became the Central Asian Cooperation Organization (CACO). Russia joined the CACO in October 2004 and a year later CACO decided to integrate EurAsEC and was absorbed by it, although Uzbekistan opted out. CACO observers by then included Georgia, Turkey, and Ukraine. Uzbekistan then joined EurAsEC in January 2006, only to suspend its membership in 2008.

IMPLICATIONS: The tripartite cooperation is officially referred to as the Single Economic Space (SES, Edinoe ekonomicheskoe prostranstvo), a phrase designed to recall the EU’s Single European Act of 1987, which set the objective of establishing a Single Market in Europe by 1992. Putin writes that supranational structures will represent a qualitative difference of the Customs Union (and its SES) from the CIS Customs Union; he points to the EurAsEC Court that will begin to operate from the start of next year and Russia’s proposal to establish an autonomous and supranational “Custom Union Commission Collegium.” His goals are to move towards “the closer coordination of economic and currency policies,” to create “a full-fledged economic union,” and to use the Customs Union to “improve the institutions” of the CIS and give it a “practical agenda” including implementation of the CIS-wide Free Trade Zone (FTZ) treaty proposed by Russia in 2010.

Putin controversially asserts that “the Customs Union, and later, the Eurasian Union, will now become a participant in the dialogue with the EU.” Still more notable is the fact that in his catalogue of integration and cooperation organizations in Europe and Asia, he does not once refer to the Shanghai Cooperation Organization, even though it counts Russia and four Central Asian countries as members and his invocations range geographically as far as the Asia-Pacific Economic Cooperation (APEC) organization. While some Russian press observers have pointed to the EU’s “Eastern Partnership” initiative launched in spring 2009 (including Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine, and Belarus (although Belarus’ continued participation is an open question) as a motive force impelling the creation of the CIS Customs Union within EurAsEC, it is therefore just as plausible that Putin’s current supranational initiative seeks to secure a Russian sphere of political influence in Central Asia. This could complement if not replace the economic dominance that is slipping away as Central Asia increases its trade in especially energy with China and other countries.

Putin suggests that the Customs Union might be increased to include Kyrgyzstan and Tajikistan, but it is not yet working among the three present members. Since the FTZ officially began operating at the beginning of July, Belarus has taken unilateral actions to restrict trade and sales of goods such as food and gasoline. The participation of Belarus is important because it gives a veneer of multilateralism to the project, but according to Russian press reports, Putin did not even discuss the idea of enlargement with his Belarusian and Kazakhstani counterparts. Indeed, Kazakhstan appears to oppose the inclusion of Kyrgyzstan in the Customs Union because of all the money it has spent fortifying that border, if for no other reason. Kazakhstan usually favors Russian initiatives for multilateral cooperation in the post-Soviet space, because the two countries’ economies are historically extremely closely linked. Kazakhstan looks for any possible leverage within the bilateral relationship, which multilateral instrumentalities and instances may provide. Also, Kazakhstan’s President Nursultan Nazarbaev may secretly prefer some titular post in the supranational organization in order to extricate himself from the politics of succession in Kazakhstan while still continuing to supervise it.

CONCLUSIONS: As far back as 1994, Nazarbaev proposed an organization called exactly a “Eurasian Union.” In his conception at the time, it would have included the five Central Asian states minus Tajikistan (then in the midst of a civil war), plus Georgia and Moldova in addition to the three Slavic states of Belarus, Russia, and Ukraine. This idea was immediately shot down by Uzbekistan’s president Islam Karimov and never gained traction despite Nazarbaev’s repeating it at various CIS summits over the course of that decade. Since then, a new autonomy-minded generation of post-Soviet publics and elites has come of age in the various former republics, and it is not clear why they should prefer such closer ties with Moscow. Recalling further that Russia and Belarus have for no less than a decade and a half been discussing without success the modalities for supranational institutionalization within their jointly declared Union State, one is entitled to a certain skepticism regarding the success of supranationalism within the Eurasian Union.

This post originally appeared at Central Asia Caucasus Institute and is reproduced with permission.

Filed under: Emerging Markets, Geostrategy

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Edwin G. Dolan is an economist and educator with a Ph.D. from Yale University. Early in his career, he was a member of the economics faculty at Dartmouth College, the University of Chicago, and George Mason University. From 1990 to 2001, he taught in Moscow, Russia, where he and his wife founded the American Institute of Business and Economics (AIBEc), an independent, not-for-profit MBA program. Since 2001, he has taught at several universities in Europe, including Central European University in Budapest, the University of Economics in Prague, and the Stockholm School of Economics in Riga, where he has an ongoing annual visiting appointment. During breaks in his teaching career, he worked in Washington, D.C. as an economist for the Antitrust Division of the Department of Justice and as a regulatory analyst for the Interstate Commerce Commission, and later served a stint in Almaty as an adviser to the National Bank of Kazakhstan. When not lecturing abroad, he makes his home in San Juan Islands, Washington.

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