Vladimir Putin’s Eurasian Economic Union gets ready to take on the world

Russia, Kazakhstan and Belarus at heart of post-Soviet trading bloc that aspires to commerce but not community

By Benoît Vitkine
The Guardian  

Ex Soviet state leaders Leaders of former Soviet states gather for a regional summit in Minsk, Belarus. Photograph: Sasha Mordovets/Getty

Until the last moment Alexander Lukashenko, the president of Belarus, held out for 7 October, to coincide with Vladimir Putin’s birthday. But in the end the parliament in Minsk ratified the treaty on Eurasian Economic Union on 9 October, the day before its first three members – Russia, Belarus and Kazakhstan – were due to meet.

It would be simplistic to reduce the nascent EEU to a toy in the hands of the Russian president. When it comes into force, on 1 January 2015, it will be the most advanced organisation for regional cooperation the former Soviet bloc has seen, an achievement preceded by many false starts.

In fact, the EEU already exists. It has a headquarters – a glass building near Paveletsky railway station in Moscow – and officials who would not look out of place in Brussels. Its member states have already lifted some internal customs barriers and harmonised others for the outside world. So much for the practical side, what analyst Nicu Popescu describes in an article for the European Union Institute of Security Studies as the “real” EEU, a trading alliance slated to guarantee free circulation of goods, services and assets, but not hydrocarbons.

The other Eurasian Union is “imaginary”, the brainchild of Putin, first mentioned in October 2011. As he sees it, this organisation will be the equal of the EU and other major regional entities, a powerful bloc that will matter on the world stage. Its official formation is also intended to show the world that Russia has fully recovered, while crowning Putin’s efforts to pull together the states making up the post-Soviet sphere of influence. Those who deride the scheme see it as an attempt to restore the empire.

This dream foundered last November in Kiev, when the Maidan protests started. They carried away President Viktor Yanukovych, guilty in the eyes of the demonstrators of refusing an association agreement with the EU. Ukraine, with its population of 45 million, was supposed to play a key role in the EEU, on account of its economic clout and the place it occupies in the Russian imagination and worldview. “Without Ukraine, Russia ceases to be a Eurasian empire,” the former US national security adviser Zbigniew Brzezinski wrote in The Grand Chessboard, in 1997.

Ukraine had to be punished, for wanting to move closer to Europe but also for refusing to join the EEU, after Yanukovych’s demise. Moscow started by restricting trade with its neighbour, then annexed part of its territory (Crimea) and finally fomented war in its eastern extremity. Russia has also put pressure on Moldova and Georgia, both of which have so far shunned the EEU.
Putin Nazarbayev Russian President Vladimir Putin, right, and Kazakhstan’s President Nursultan Nazarbayev. Both Belarus and Kazakhstan demanded subsidies in the form of gas or cash to join the EEU. Photograph: Dmitry Astakhov/AP

Belarus and Kazakhstan have often voiced their concern at the treatment meted out to Ukraine. They have worked to limit the political weight of the Union too. Kazakh President Nursultan Nazarbayev lobbied hard to get the word “economic” in the title and both states demanded a high price – gas or cash – for joining.

Although Putin is determined to push the EEU perimeter as far as possible, it is not yet clear what real economic benefit countries will gain from membership. Apart from Belarus and Uzbekistan, all former Soviet states have stronger commercial links with either the EU or China than with Russia.

Since the first customs measures were introduced in 2010, only Belarus has benefited. Enlargement to include poorer states such as Armenia, Kyrgyzstan or Tajikistan would make the balance of the EEU even more precarious.

But what counts for Putin is the image of Russia restored and the bolstered notion of a president embodying a conservative bulwark against western decadence. As Popescu puts it, the Russian president is prepared “to spend a few billion a year on a foreign policy project that, in his opinion, brings geopolitical benefits to his country, as well as domestic political benefits”.

So who else may join? Armenia, which has Russian troops on the ground and is counting on Moscow’s support in its conflict with Azerbaijan over the Nagorno-Karabakh region, has announced plans to join shortly. The president of Kyrgyzstan, tipped to be next on the list, has displayed only lukewarm enthusiasm, a stance he made clear in December 2013: “Ukraine has a choice, but unfortunately we don’t have much of an alternative.”

Moscow’s bear hug inspires fear and it has little in the way of soft power or other attractions to compensate. At an institutional level the EEU resembles the EU, but its workings are likely to be much more top-down, hinging on the power and domination of Moscow. “There is no concept of building a community in the EEU,” says Thomas Gomart, an analyst at France’s International Relations Institute, “but given trends in the EU, the Russians think their model is more viable.”