Friday, May 30, 2014

On the Eurasian Customs Union Agreement

Russia, Belarus, and Kazakhstan have just signed an agreement to have a Eurasian customs union come into place this coming January, with trade barriers set to fall, "cooperation" claimed to move forward for leading sectors, and for workers to be able to freely move about from one nation to the other without work permits or visas for purposes of employment.  This resembles agreements made in the past within what used to be known as the European Economic Community, now developed into the European Union.  Ukraine was supposed to be part of this deal, but the overthrow of former President Yanukovich by Maidan Square demonstraters made that not happen, and newly elected President Poroshenko is unlikely to join, although he has expressed willingness to negotiate wiht Russian President Putin on various matters.

I note that this moves forward Putin's effort to reconstitute at least a portion of the former Soviet Union in an economic and political group led by Russia.  Led by Europe's most dictatorial leader, Alexander Lukashenka (or Lukashenko), Belarus has long been the most closely allied with Russia of any of the former other 14 republics, now nations.  It is fourth in population of the former republics and I think also fourth in land area, although not quite sure about that last figure.  Its economic system is probably the closest to that of the old Soviet Unon of any of the former republics, although it has a few rivals in Central Asia not part of this agreement.  It has been quite economically stagnant since the end of the USSR, although higher in income than many of the former republics. 

Kazakhstan is second in land area and contains substantial energy resources.  Like in non-member Uzbekistan, its leader, Nursultan Nazarbayev, is a full holdover from the Soviet era, a former member Communist Party chief of the republic at the time. All both of these leaders did was to change the name plates on their doors and replace their old party affiliations with newly created ones.  Kazakhstan has had more success than Belarus in making successful changes in its economy and has substantially improved its economic standing, one of the better performers among the former republics, although its political system remains highly authoritarian, very much along the lines of what one finds in the other two nations in the new union.

Where does all of this fit in to other groups and what are its prospects?

One place it fits is with the larger Shanghai group that includes other former republics as well as China and Iran and a few other nations.  This latter group is more of a political and military grouping, although as of now still very loose and more of a talking shop and designed to signal a degree of friendliness and lack thereof with respect to the US.  I doubt there will be too much interaction between these two groups.

More interesting will be to see which of the former Soviet republics might join, at least in the near future.  The most immediate candidate appears to be Armenia, which has also long had relatively friendly relations with Russia, whom its leaders view as a protective big brother against such hostile neighbors as Azerbaijan, Georgia, and Turkey, all of which are not particularly friendly with Russia.

Another possible near term candidate whose leader attended the signing ceremony, although he has not said anything about specifically about joining so far, is Kyrgyzstan in Central Asia.  Much smaller than either Kazakhstan or Uzbekistan, Kyrgyzstan has had a complicated post-Soviet history.  It is on the Chinese border and reportedly Chinese economic influence has become very large there.  At one point it was viewed as the most reformist and pro-US of the Central Asian nations, providing airfield support for the US military effort in Afghanistan.  However, it has moved to becoming much more pro-Russian in recent years.  It could easily join, but is a small and not very well-off nation.

Among other former republics there is a range of attitudes towards Russia, with this likely being the main variable determining the interest or lack thereof in joining this new group, which will probably enjoy some increase in mutual trade and investment as a result of this agreement.  Many of these attitudes are deeply entrenched and date back to the Soviet era.

So, none of the Baltic nations are likely candidates, now all members of the EU, with two of them now also both using the euro and in NATO, namely Estonia and Latvia, although arguably Lithuania may be the most nationalist and anti-Russian of the three.  Others that have been and are strongly anti-Russian and not likely to join are Georgia, which was invaded by Russia in 2008, and Azerbiajan, among the trans-Caucasian nations.  Moldova, the lowest income nation in Europe, is also unlikely to join, given Russian support for the trans-Dniestrian republic that supports Russia and is carved out of Moldovan territory, with this autonomous republic probably the model for the still-asserting itself Donetsk Peoples' Republic in eastern Ukraine, with Ukraine not likely to join either, as already noted.

The situation in Central Asia is somewhat more complicated.  Kazakhstan is joining, while the third largest in population of the former republics (after Russia and Ukraine), Uzbekistan appears unlikely to do so.  With its former Soviet official, Islam Karimov, in charge, he has gone back and forth in regard to his relations with Russia, currently on the not-so-friendly side, although that nation is part of the Shanghai group.  Ironically, Uzbekistan is one of those most closely competing with Belarus for having an economic system that most closely resembles that of the former Soviety Union's, but it has always been run by local elites and been a source of major corruption, with the famous case of the nonexistent cotton mill under the USSR not existing in Uzebekistan.

Finally, there are Tajikistan and Turkmenistan.  The former has long been the poorest of the former republics, dating from Soviet times, the extreme opposite of well-off and semi-Nordic Estonia.  It could conceivably be a candidate to join this new grouping, but has so far made no moves to do so.  As for Turkmenistan, it contains substantial natural gas reserves and has chosen a path almost like North Korea's in being extremely isolationist on almost all fronts and issues, using its gas to cut bilateral deals and otherwise keeps to itself in a highly authoritarian state.  It also competes to be like the former USSR in its economic system, althoiugh more idiosyncratic, but with its current highly nationalist and isolationist approach, it is highly unlikely to join this new grouping.

Barkley Rosser

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