Image courtesy of (pdf) the Eurasian Commission.

By 2015, Russia Wants To Establish A Eurasian Union To Rival The EU

As Russia plans to create a Eurasian Union, is it an initiative to revitalize stagnant economies, or an attempt to re-establish a Soviet Union “lite?”

After the fall of the Soviet Union in 1991, the world suddenly had 15 more nation states, some of whom had not been sovereign territories since the 19th century.

Nevertheless, calls for a re-integration of the Eurasian region were soon heard, often led by Russia, according to (pdf) a Chatham House paper.

In 2005, Russian President Vladimir Putin called the fall of the USSR “a major geopolitical disaster of the century.”

There’s been a smattering of different attempts at unification, including the Commonwealth of Independent States security union, but a lack of commitment to creating the institutions have stalled efforts, Chatham House writes.

But with the EU increasing its engagement in post-Soviet countries during the mid-2000s, President Vladimir Putin made economic Eurasian integration a foreign policy priority, a move many saw as a way to counter eastward expansion of the EU.

In recent years, Russia has created both a customs union with Belarus and Kazakhstan, a free trade agreement with eight former Soviet states, including Ukraine, and a visa-free zone (pdf) with four other countries.

The ultimate goal: establish a Eurasian Economic Union (EAU) that can rival the EU.

EAUill

Image courtesy of Datastat via Wikipedia.

An Eastern EU?

Above, the graphic shows Russia, Belarus and Kazakhstan, the three current signatories of the EAU, which is intended to be established by Jan. 1, 2015.

The union will be based on the EU model, removing barriers to trade such as tariffs, border inspections and the need for travel and work visas. It will also establish a common customs code and a common regulatory agency called (pdf) the Eurasian Economic Commission.

According to a brochure on the Commission’s website (pdf), the Union will cover 15% of the world’s land surface and include more than 170 million people. The members of the customs union traded nearly $1 trillion worth of goods between them in 2011, spurred by the new agreement.

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Combined, their GDP is $2.3 trillion, obviously still a fraction of the U.S. $15 billion, or the EU’s $16 billion.

Once established, however, Russia is hoping it will be expanded to include the resource-rich but underdeveloped ex-Soviet countries in Central Asia such Uzbekistan and Turkmenistan, or even Mongolia.

Russia was extremely keen to pull Ukraine in, instead of allowing the former Soviet Republic to join the EU and hence the Western sphere of influence.

Not only does Ukraine have a strong industrial base, abundant agriculture and millions of skilled workers, it’s also the considered the cradle of Russian civilization. And as the map above shows, the addition of Ukraine would stretch the EAU’s influence far into Europe.

However, the annexation of Crimean and the conflict in Ukraine may have worked against the Russia Eurasian union plan, as Ukraine leaders consider EU membership,  and as Kazakh­stan rethinks their participation in the alliance.

Criticism

The project has been criticized as a method of shoring up Russian influence in the post-Soviet space.

Western leaders have been vocal in their opposition to the union. In 2012, then-Secretary of State Hillary Clinton called it “a move to re-Sovietize the region.”

Russia does seem to have an outsized decision power and influence over the EAU.

For instance, Russia receives nearly 90% of all collected custom duties.

And in the union’s regulatory agency, the EEU, Russia has one vote weighted at 57%, while Belarus and Kazakhstan both have a vote weighted at 21.5%.

This mean Russia will always need the agreement of one other country to make a decision, but the two other countries can never make a decision without Russia’s agreement, according to Chatham House.

The decisions of the Eurasian Economic Commission have been determined to be “binding,” meaning that they have domestic legal force without having to be ratified by member states, according to Chatham House.

This, along with Russia’s recent disregard for other nations’ sovereignty, could lead to troubles if other nations decide not to play along with Putin’s Eurasian dream.

Updated:9.5.2014

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Ole Skaar