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The Eurasian Economic Union Analyses and Perspectives from Belarus, Kazakhstan, and Russia

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The Eurasian Economic Union Analyses and Perspectives from Belarus, Kazakhstan, and Russia PERSPECTIVE The Eurasian Economic Union Analyses and Perspectives from Belarus, Kazakhstan, and Russia FELIX HETT AND SUSANNE SZKOLA (ED.) February 2015 n On the 1st of January 2015, the agreement on the Eurasian Economic Union (EEU) entered into force. This ushers in the next stage of the integration project of Bela- rus, Kazakhstan, and Russia that was established in 2007, and which looks to the European Union as a model in many aspects. This publication brings together four perspectives from the three member states of the EEU, which together sharpen the vision on the emerging trends and contradictions in the Eurasian integration process. n Within the EEU there exists a tension between deepening and enlargement. After a series of unsuccessful attempts to integrate the post-soviet region under Russian leadership, the EEU represents the most serious approach to achieve this goal. How- ever, the economic side of things is currently threatened to be swept under the wheels of a rapid expansion dominated by geopolitics. In this way, the EEU could suffer the fate of its predecessors – that to a large extent only exist on paper. n The economic calculus dominates the smaller – in terms of economic power and population numbers – EEU states of Kazakhstan and Belarus. Both countries want to achieve economic gains without sacrificing any sovereignty. Minsk and Astana have rejected suggestions from Russia of political integration. FELIX HETT & SUSANNE SZKOLA (ED.) | THE EURASIAN ECONOMIC UNION Contents Foreword . .3 Felix Hett and Susanne Szkola Caught between the Economy and Geopolitics .................................4 Andrey Zagorski Expansion and Free Trade . 8 Elena Kuzmina Kazakhstan: Economic Integration without Relinquishing Sovereignty ............11 Dossym Satpayev Belarus: Muted Integration Euphoria ........................................15 Arseniy Sivickiy Authors ���������������������������������������������������������������������������������������������������������������������������������20 1 FELIX HETT & SUSANNE SZKOLA (ED.) | THE EURASIAN ECONOMIC UNION Foreword On the 1st of January 2015, the Agreement on the Eur- pansion dominated by geopolitics. In this way, the EEU asian Economic Union (EEU) entered into force. This could suffer the fate of its predecessors – that to a large ushers in the next stage of the integration project of extent only exist on paper. Belarus, Kazakhstan, and Russia that was established in 2007, and which looks to the European Union as a mod- Elena Kuzmina (Moscow) sees the expansion of the EEU el in many aspects. With the establishment of a customs around Kyrgyzstan, Armenia, and Tajikistan in a clearly union in 2010, the appointment of a Eurasian economic more positive light, especially with regards to the po- commission in Moscow in 2012, and the signing of the tential economic advantages. Furthermore, Kuzmina dis- agreement on the EEU on the 29th of May 2014 the fun- cusses the possibility of a free trade agreement between damental pillars have been built. the EEU and Vietnam and Turkey. Global interest in the EEU grew over the course of the Two further articles concern themselves with the view- conflict in Ukraine, the starting point for which in the points of the much smaller – in terms of economic eyes of many observers was the integration rivalry be- power and population number – EEU member states, tween the customs union and the EU over Ukraine. Re- Kazakhstan and Belarus. Both countries strictly limit the garding this increase in interest, the dominating inter- impact of the integration project on their economies – pretation in the EU has consigned the EEU as part of Minsk and Astana have rejected suggestions from Rus- Russia’s, and its president’s, Vladimir Putin’s, personal sia of political integration. The economic calculus reigns geopolitical project, far removed from any economi cally- supreme. rational perspective. Dossym Satpayev (Almaty) analyses the growing unease In the present publication, four perspectives from three in the Kazakh community surrounding the integration member states of the EEU have been drawn together, project and Russian intentions. It remains open as to which together sharpen the vision on the emerging how far the Eurasian integration direction of the country trends of the Eurasian integration process – and its nu- would progress under a possible new president. merous contradictions. Arseniy Sivickiys (Minsk) perspective on the EEU hinges Andrey Zagorski (Moscow) takes the tension between on clear differences of interest in the design of the EEU deepening and enlarging the EEU as the central theme in contract and its implementation, and asserts a position his article. After a series of unsuccessful attempts under that is as sceptical for Belarus as it is for Kazakhstan. Fur- Russian leadership to integrate the post-soviet region, thermore, he thoroughly describes the position on the the EEU presents the most serious path to achieving this EEU of various actor groups within the country, and how goal. However, the economic side of things is currently it became possible, also through the crisis in Ukraine, to threatened to be swept under the wheels of a rapid ex- assert national interests against Russia. Felix Hett & Susanne Szkola 3 FELIX HETT & SUSANNE SZKOLA (ED.) | THE EURASIAN ECONOMIC UNION Caught between the Economy and Geopolitics Andrey Zagorski The formation of the EEU comprising Russia, Belarus, What Distinguishes the EEU from its and Kazakhstan is one of the foremost priorities in Rus- Predecessor Organisations? sian politics. The progress that has been achieved in a short period of time (completion of the customs union The Eurasian Economic Union is not the first integration in 2011, formation of the Eurasian commission of the project of its kind in the post-soviet region: unified economic area in 2012, the signing of the con- n In 1993 a contract detailing the formation of an eco- tract on the Eurasian Economic Union in May 2014, as nomic union made up of 12 member states in the well as the preparations for the rulings on expanding Commonwealth of Independent States (CIS) was the union to other states) is often held up as an exam- signed. ple of the efficiency and attractiveness of post-Soviet n In 1995, Belarus, Kazakhstan, and Russia signed an integration. agreement on the formation of a customs union, which Kyrgyzstan joined in 1996, and Tajikistan in In Russia, the establishment of the EEU is viewed above all 1999. In 2000 this project was turned into a Eurasian else as a geopolitical project. The EEU is called upon to: Economic Community (EEC). n provide a much sought-after alternative to associat- ing with the European Union; Both projects were meant to realise what today is being n become a second (Euro-Asian as well as Euro-Atlan- sought for in connection with the EEU: the establish- tic) pillar in the pan-European security architecture ment of a free trade zone, the founding of a customs and to; and payments union, as well as a uniform economic n demonstrate Russia’s role as the uncontested regional area, and, in the future, even a monetary union. All of power. these goals, however, have not yet been reached. The attractiveness of the EEU for its further member Among the far-reaching structural deficits, which hinder states is analysed against the background of the possible the integration of the post-soviet states, is a particularity profit to the new states. Alongside the voting in of par- of both agreements, which meant that in reality, neither ticular agreements, the initiators of the EEU-formation an economic nor customs union was sought. Both of promised major effects on the economy, which were to these contracts concerned themselves only with »road occur within just five years. maps«, which merely marked out stages and aims of in- tegration. The accordant, normative basis necessary for Proof of the »advantage beyond all doubt« of the in- the realisation of these goals was yet to be brought into tegration with Russia can be found in the »explosive existence. This very complex set of rules was supposed growth«, to use the words of Putin’s advisor, Sergey to be encompassed in dozens of agreements, which Glazyev, in the reciprocal trade of the EEU member needed to be developed, signed, and ratified. But nei- states in 2011. ther the CIS economic union, nor the EEC were up to the task, thanks to the different interests and divergent The fact that the EEU is still so young means that for positions of their member states. now there can be no thorough appraisal of the promise that was made a few years ago. In light of the daz- In this respect, the EEU is different to its predecessor or- zling predictions, the real effects on the economy of ganisations. Thanks to its limited circle of participants of the union formation do, however, seem rather modest only three states, it is possible to develop a comprehen- to date. The Eurasian Economic Union has a very weak sive set of rules in a short amount of time, in the form economic basis, whilst an accelerated expansion of the of more than a hundred contracts and agreements that EEU could even negate the modest achievements made should guarantee the functioning of the customs union up to now. and the uniform economic area. In spite of all the gaps in 4 FELIX HETT & SUSANNE SZKOLA (ED.) | THE EURASIAN ECONOMIC UNION the current base set of rules, all exceptions in the coordi- join the union, one would be well-advised to deny them nated procedural framework, all the time-limited special entry in the interest of protecting the integrity of the EEU. conditions, in spite of all promises of returning in the On the other hand, one might be forced to accept them future to discuss particularly pressing questions, the EEU under special conditions, and so accept the fact that the represents the first integration project in the post-soviet new member states will not accept all the rules, but just region that actually has an acquis.
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