By: Seyed Mohammad Alavizadeh
Introduction
The Eurasian Economic Union (EAEU) is the epitome of economic and security integration among the post-Soviet states. The initiative was firstly introduced by Kazakhstan's President Nursultan Nazarbayev at Lomonosov Moscow State University on March 2, 1994, and the first formal step in the implementation of this plan was taken in the form of the Eurasian Customs Union (EACU) in 2007. Following its implementation in 2010, EACU finally led to the establishment of the EAEU in 2014. In addition to the participation of the founding members of the union - i.e. Russia, Kazakhstan and Belarus - the accession of Armenia and Kyrgyzstan to EAEU in 2015, brought this regional economic and trade mechanism, which had been in operation since January this year, to its current form, and made it play a role in the economic equations and trade exchanges of these countries.
The EAEU is considered by many regional countries and experts as a Russia-based (Russia-centered) mechanism which complements the Collective Security Treaty Organization (As a security and military mechanism). This assessment has made some countries in the region, even Russia’s main trading partners such as Uzbekistan, cautious about joining the union. Despite the potential economic benefits of the EAEU, the political considerations have prevented the Republic of Azerbaijan and Georgia from joining the bloc. However, in addition to the main members, Uzbekistan and Moldova are currently participating in the union’s summits as observers, and Vietnam, Singapore, Iran and Serbia are cooperating with the union as states with a Free Trade Agreement.
The EAEU, like any other intergovernmental mechanism, contains a series of rights and obligations that inevitably will bring some opportunities as well as constraints. It is natural that the main condition for any country to join such mechanisms in general, and the EAEU in particular, is the dominance of its opportunities over constraints. The outcome of these equation is determined by the convergent nature of this mechanism or by the national, regional and international conditions of the member states or candidate countries. Nevertheless, there are some theoretical propositions that essentially consider any entanglement and interdependence in the international community as an opportunity.
EAEU’s 2025 strategy and member states' approach
With emergence of Eurasianism in Russia’s foreign policy, a phenomenon which was began with inauguration of Russian Foreign Minister Yevgeny Primakov in 1996 and was intensified by the presidency of Vladimir Putin in 2000, the geographical territory of the former Soviet Union became the top priority for foreign relations. This raised many questions about Russia's intention to revive the Soviet Union’s geopolitical atmosphere and the possibility of reviving a union like the Soviet Union in the region. It is worth mentioning that the establishment of the Russia-centered structures such as the Commonwealth of Independent States (CIS), the Collective Security Treaty Organization (CSTO), the Eurasian Economic Union and other bilateral and multilateral mechanisms has exacerbated these concerns.
Contrary to Russia's explicit and implicit tendencies, other countries, especially the founding members such as Belarus and Kazakhstan, believe that the union’s activities must be limited to economic issues not Political ones. The members (except for Russia) have repeatedly emphasized over a purely economic alliance which has nothing to do with politics. This disagreement between Russia and other members over the future integration revealed itself during the last summit of the Eurasian Economic Union on May 19, 2020, held via video conference.
At the meeting, various issues were raised all around the integration of the member states. One of these issues was the approval of the general framework of the macroeconomic policies of the union in 2021-2020 and the unification of tariffs.
But, the most important topic was the union’s 2025 strategy, which Unexpectedly raised many criticisms. For more details, it is good to read the comments that were made by the heads of states during the session. Nikol Pashinyan, the prime minister of Armenia, slammed the document over its statements regarding energy carriers and reiterated that it lacks a clear roadmap for creation of a common energy market and also a proper pricing mechanism for natural gas, Especially in the perspective of the interests of Armenia.
He also emphasized the importance of non-discriminatory measures in establishment of a common energy market as the cornerstone of integration.
[1] The Belarussian President Alexander Lukashenko also criticized the union over its failure to achieve a comprehensive pricing mechanism as well as its inability to persuade all the members.
[2]
Paying attention to these criticisms is crucial in terms of understanding how the union works, because the three countries of Armenia, Belarus and Kyrgyzstan are using the energy that produces by two other member states, Russia and Kazakhstan. As the EAEU does not include a common energy market and inclusive prices, the import and export of the energy resources take place under bilateral agreements between each of the members.
In this regard, it is interesting to know that every 1,000 cubic meters of the Russian gas is being exported to the EU member states at an average price of $65, while the same amount of gad is being sold to Belarus at the rate of $127 and to Armenia at $150. On the other hand, the drastic decline in the price of natural gas in the international markets (due to the decline of global demand caused by the coronavirus pandemic) and its social impacts over the importer countries has made any political and social integration difficult.
Another critic of the current situation and the 2025 strategic document was Kyrgyz President Sorenbay Jinbekov. Referring to the recent regional developments caused by the covid-19 restrictions and also the obstacles that exist on the way of a free trading among member states even in pre-corona era, Jinbekov harshly criticized the union over its inefficiency and also inability to adapt itself to the new situation. He also suggested a number of changes in the 2025 strategic document in order to allow the Eurasian Economic Commission to refer to the judicial body of the EAEU and also increase the Commission’ power and flexibility.
[3]
But, perhaps the most important criticism was the unpredictable remarks that were made by Kazakh President Kassym-Jomart Tokayev which raised serious questions for the leaders and experts at the summit. First of all, he emphasized the role of the strategic documents in any regional integration, adding that the approval of the 2025 document is something beyond the abilities of a multilateral virtual meeting. Tokayev also said that Fulfillment of the obligations of this document only possible after a comprehensive assessment of its political, social and economic consequences.
He also reiterated that the goals and perspective of the 2025 document are opposed with the initial goals of the Eurasian Economic Union. Tokayev further noted that the document’s entry into the educational, cultural, social and political affairs of the member states is something beyond the initial duties of the union and contrary to the economic interests of the members. He also highlighted the necessity of bilateral talks among the members and asked the countries to change the structure and staff of the Eurasian Economic Commission.
[4] As can be seen, one of the remarkable features of Kazakhstan's view is its special focus on economic issues and also unwillingness to extend the union’s activities to other fields.
But, the last speaker was Russian President Vladimir Putin, who, despite the critical comments of other leaders, stressed the necessity of integration. He also emphasized the effectiveness of administrative and custom procedures, the launch of a digital network, the acceleration of clearance processes, the expansion of scientific cooperation, and the promotion of the union's moderating position. But, what is worth considering is Putin's silence on Kazakhstan's views and also his responses to Armenia and Belarus’ criticisms. He noted that the establishment of a common energy market and approval of equal energy prices among the member states is dependent on having a common budget and tax system. Since the Eurasian Economic Union member states do not currently have such a level of integration and there is no agreement about a single tax and budget system, demanding equal prices for natural gas and other energy carriers is irrelevant, he added.
[5]
The dual strategy of the members regarding the energy carriers is quite obvious. While Armenia and Belarus have chosen the "cheap gas first, then integration " option, Russia has opted " Any use of gas benefits and discounts depends on the depth of the members’ integration."
Despite the fact that this approach is not something new in Russia’s foreign policy, the world is increasingly witnessing such explicit acknowledgments in the remarks of the Russian president and even prime minister these days. A few months before the May 2020 summit, Putin had evaluated the post-Soviet region ready for a new and deeper integration, hoping that the countries of the region would overcome the false fears of the Soviet era. Moreover, a few weeks before the meeting, Mikhail Mishustin,
Prime Minister of Russia, assessed the members’ call for an equal pricing system as a sign that shows their readiness to achieve a higher level of integration and unity.
[6]
But at the end of the meeting on May 19, 2020, as it was suggested by the president of Kazakhstan, the Eurasian Economic Commission Staffing Protocol was approved by the members and any final decision on the 2025 strategic document was postponed to the next meeting that will be held in the autumn in Belarus. Until then, a more detailed and comprehensive study of the 2025 document and also effort to achieve consensus were put on the members’ agenda.
Conclusion
What is certain is that in the coming years, the Eurasian Economic Union will remain as one of the most important post-Soviet integration trends which has formed around Russia’s pivot role in the political, military and economic fields. The union has provided one of the best contexts for Russia to maintain the scope and depth of its influence in the “
Near Abroad”. But, on the other hand, it seems that the differences between Kazakhstan as one of the first initiators of the eurasian economic integration mechanism, and Russia as the most important player of the bloc, will continue. Russia has openly proposed raising the level of cooperation to other spheres such as political, cultural and educational, while Kazakhstan plans to limit the boundaries of the union to the economic and trade issues. The Contradictory comments made at the recent EAEU summit are also a clear example of these differences. Armenia, Belarus and Kyrgyzstan, as the other main members, are located somewhere among this Kazakh-Russian spectrum, in proportion to their dependence on Russia in other non-economic areas (Especially military and security areas).
Meanwhile, in the short term, achieving political unity in the form of the Eurasian Union is far from expected. Even achieving such integration in the medium term is fraught with serious doubts.
In the long run, Russia's demand for more integration or its idea for creation of a new alliance among the post-Soviet states would be in tough competition with other countries’ growing desire for independence and preservation of the national sovereignty. After nearly three decades since the beginning of the state – nation building procedure in the post-Soviet countries, such tendencies are still the most important challenge against the formation of any Russian-oriented integration in the Post-Soviet region.
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