How Significant Is the Eurasian Economic Union?

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How Significant Is the Eurasian Economic Union?

Moscow’s high hopes for the union have come up against reluctance among its neighbors.

How Significant Is the Eurasian Economic Union?
Credit: Presidential Press and Information Office, Kremlin

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. He can be followed on Twitter at @cjcmichel.