What Can Kyrgyzstan Expect from EAEU Membership?

18.06.2015

Kyrgyzstan has become a de jure member of the Eurasian integration project and managed to overcome all the difficulties related to coordinating positions of the “old” CU and EAEU members.

Recently President Almazbek Atambayev signed into law a bill ratifying Kyrgyzstan’s accession to the Eurasian Economic Union (EAEU). Maria Komarova, a correspondent for www.valdaiclub.ru, asked Andrei Grozin, head of the department of Central Asia and Kazakhstan at the Institute of CIS Countries, a few questions about the news out of Kyrgyzstan.

Kyrgyz leaders have requested that the parliaments of EAEU countries ratify the country’s accession before next fall. Is this request linked with the parliamentary elections scheduled in Kyrgyzstan for the fall?

Absolutely. The upcoming elections to the Zhogorky Kenesh (Parliament) in the fall are completely shaping domestic politics. Political life in Kyrgyzstan will intensify considerably this year given the likely deterioration of the economic situation and a decline in remittances from Kyrgyz working abroad. Kyrgyzstan is likely to be swept by a series of rallies. The fact that people will be rallying is not the important story, though. In 2013 there were about 2,000 protests in the republic. What matters is how many people will take part in them and how radical they will be. These factors largely depend on the economic situation, as well as the financial strength and the unity of the opposition. If current trends persist, the Kyrgyz opposition is likely to remain fragmented and will not take part in the elections as a single bloc due to long-standing disputes.

The threat of ethnic conflict will remain for at least the next five or even 10 years. Considering that the authorities are not taking serious measures to address the root causes and only deal with their symptoms, conflict may erupt any time. It will become more likely if the economic situation rapidly deteriorates and the central government becomes weaker. Pro-Western opposition parties will step up their efforts, focusing their outreach efforts on supporters of the Western path of development, nationalists and people who will suffer financially from Kyrgyzstan joining the EAEU.

Despite the predominately negative trends in the country, Kyrgyzstan is likely to have relatively calm parliamentary elections and no major shakeups for the rest of the 2015 political calendar. Barring an act of God, President Almazbek Atambayev will be able to secure a parliamentary majority from the parties loyal to him.

Do you think Kyrgyzstan’s membership in the EAEU will yield meaningful dividends for the Kyrgyz economy and people?

Full membership the EAEU is bound to be accompanied by difficulties. The republic’s infrastructure and legal system are not yet ready for accession. Having joined the EAEU, Kyrgyzstan may experience shocks. The benefits will be felt after a year or two at the earliest. Importantly, this will happen only if its government, parliament and presidential administration are able to work together to get all the “homework” done without the internecine feuds that are so typical of the Kyrgyz elite. I hope for that very much, but regrettably the quality of the country’s elite and anti-elite leaves much to be desired.

It is to be hoped that the Kyrgyz political class will receive active support from EAEU partners (primarily Russia and Kazakhstan). Only in this case it will be able to transform its financial system, switch its economy from the current service-intermediary model to real production, and revive its industrial potential. Kyrgyzstan has some advantages on this road but has to use them skillfully. It hopes to receive investment by letting China and the EAEU move their enterprises to its territory. It has some competitive benefits – a 12% VAT and low energy costs (four times lower than in Kazakhstan). Workers with similar training earn less in Kyrgyzstan than in other EAEU countries. The newly elected Prime Minister Temir Sariyev (former minister of the economy) has already named the primary beneficiaries from the country’s EAEU entry: agricultural producers, workers in the processing and textile industries and, certainly, guest workers. “We primarily bring to this market products of agriculture (fruit and vegetables, cotton fiber and tobacco), the food industry (dairy and meat products), light industry (textiles) and the processing industry (glass and radiators).

Is there strong opposition to joining the EAEU in Kyrgyzstan, as some media report? At any rate, Kyrgyz officials repeatedly complained that the opposition and outside forces are stoking dissatisfaction. The Kyrgyz people are allegedly being persuaded that Bishkek only stands to lose from joining the Customs Union (CU) and the EAEU, and that Atambayev’s pro-Russian course is pushing the country towards confrontation with the West. Is this true? How interested is the West in Kyrgyzstan’s orientation?

The most serious risk factors in Kyrgyzstan are as follows:

- Worsening economic conditions, evident now in the growth of prices, the devaluation of the national currency, a decline in remittances from guest workers; things may become even worse when Kyrgyzstan become a full EAEU member;

- Unresolved ethnic issues and a likely repetition of the large-scale ethnic conflicts of 1990 and 2010;

- A weak central government that still does not have complete and unquestioned control over the country’s regions despite some consolidation in the past couple of years. Separatist attitudes are likely to grow as well. Naturally, outside forces are exploiting all these factors. For them Kyrgyzstan is important not in itself but as a means of countering Russia’s influence and integration in Central Asia. In this respect Kyrgyzstan has been used as a laboratory for at least a decade. In Kyrgyzstan, Russia’s competitors are testing various methods to be used in other Central Asian states. They have established more non-profit and non-governmental organizations there than in any other country. Relying on their network they can change the country’s geopolitical trajectory much faster and with better results than in other states.

Kyrgyzstan has about 15,000 NGOs, out of which some 300-400 are fully operational. They are more effective and sometimes even better financed than government bodies in Kyrgyzstan. NGOs have a large number of offices throughout the country, including its remotest parts. In some spheres NGOs partially (in some cases by 50%-70%) replace government bodies, which have withdrawn from attempting to resolve the country’s problems. Tellingly, Kyrgyz experts estimate that about 85% of active NGOs receive money from the United States or countries of the European Union. The remaining 15% come from Middle Eastern states, East Asia and Russia. The overwhelming majority of Russia-supported NGOs are fairly ineffective.

Is it possible that the republic’s political system is stable enough to consider its current path of integration as irreversible?

No, it’s too early and too optimistic to call it irreversible. Anything can happen in Kyrgyzstan. The current situation, however, is less likely to suddenly destabilize than, for instance, in the spring or fall of last year. The government appears stronger than it was one a couple of years ago. Despite the efforts of outside forces to organize the opposition, it is still a collection of disparate figures. There are fewer and fewer opportunities for outside actors to directly influence the country’s domestic political processes, but the change has been slow. The example of Ukraine is also mobilizing the government much more than their right- and left-wing opponents.

But the risk of another Kyrgyz uprising is still there and, to repeat, anything can happen in that country. Alas, a crowd that is aware of its strength and impunity is impossible to control. A leader who is not afraid to assume personal responsibility for taming it will win. For example, Islam Karimov did this in Andijan (Uzbekistan) and won. Viktor Yanukovych failed to do this in Kiev and is now hiding in Russia. Apart from resolve, you need to have muscle. Karimov had it in Andijan and Nursultan Nazarbayev had it in Zhanaozen (Kazakhstan). They still have it, but Kurmanbek Bakiev wasn’t able to fully or consistently tamp down unrest.

In my opinion, today Kyrgyzstan is not really ready for independent nationhood despite a heroic past spanning millennia. I am primarily referring to its national elite. As a result public unrest is a regular occurrence. The Kyrgyz people, taking a cue from their irresponsible establishment, believe that they can also do whatever they want – violate the law, put pressure on foreign investors and let people on the margins have the final say in every decision.

President Atambayev is slowly but steadily accumulating power and administrative resources but they are not yet strong enough to single-handedly confront the challenges of a possible color revolution or some local version of the Arab Spring. As with the economy, he can only hope for assistance from his allies and the continuation of his policy of gradually ending the protracted political instability in Kyrgyzstan. Time is the only remedy here.

What have been the results so far of the work to join the EAEU? What is the portfolio of preferences and special agreements? What are the sticking points?

The main result is that Kyrgyzstan has become a de jure member of the Eurasian integration project and managed to overcome all the difficulties related to coordinating positions of the “old” CU and EAEU members. In 2014, when President Atambayev announced his determination to join the EAEU by May 2015, many analysts both inside and outside the country were skeptical. Some were convinced that it would not happen for both domestic and foreign reasons. At home, there was the resistance of a number of elite groups and grant-eaters totaling 200,000 or 250,000 people, while some foreign power centers brought pressure to bear on Bishkek. But owing to the commitment of the president, the current prime minister and a number of other Kyrgyz leaders, this step has been taken.

However, now Kyrgyz businesses are finding out that government officials have not implemented some of the measures required for EAEU entry, causing difficulties with some exports. The authorities mumble apologetically, and there is hope that these shortcomings will be corrected belatedly by the end of the year.

In addition, Russia is dealing with an economic crisis and may have to cut planned investments in large-scale infrastructure projects (primarily in the hydropower industry). Less money has come into Kyrgyzstan than expected. The value of the som (local currency) is falling. There is a feeling in Kyrgyzstan that the downside of EAEU membership will be felt acutely, while the upside will be limited in the first year after joining for the overwhelming majority of the population (except guest workers and their families).

No one is to blame for this state of affairs. That said, the Kyrgyz authorities should be more active in explaining to their people that EAEU membership is not a “ticket to paradise” but a chance to avoid turning into another Afghanistan or Somalia. The official propaganda is obviously doing less than it should in this respect. The media of the EAEU partners are not doing enough, either.

But for the time being everything looks fairly good – the majority of people in Kyrgyzstan consider Russia to be their main economic partner. This is according to a poll of 1,500 residents of Kyrgyzstan conducted in May by Baltic Surveys and commissioned by the US International Republican Institute. Fully 94% of respondents said that cooperation with Russia benefits the Kyrgyz economy. Only one percent agreed that Russia poses an economic threat to Kyrgyzstan, whereas 57% identified the United States as the main threat to the Kyrgyz economy. Only 13% expressed support for partnering with the United States.

Kyrgyz citizens were also asked their opinion on the republic joining the CU and EAEU. About 39% of respondents expressed unconditional support; 37% support joining in principle; 11% do not support it in principle; and 3% were absolutely against it. Among the pluses respondents named were freedom of movement and jobs in Russia (42%); a common economic space (10%); and growth of trade, including exports (6%). Minuses included the possibility of higher prices and taxes (16%); declining living standards and the elimination of certain benefits (5%), and possible negative consequences for the economy (3%).

However, a weak communication strategy can easily squander this potential. Frustrated expectations could easily reverse these figures.

What are the main economic and humanitarian aspects of cooperation between the CU and EAEU members?

I am not an economist, so I will just say a few words about the prospects of humanitarian cooperation with Kyrgyzstan. Unlike the United States and China Russia has a unique source of influence in that country – guest workers. It should pursue a rational migration policy that meets its socio-economic needs and enhances its appeal. It is possible to use NGOs for this purpose, with the added bonus of strengthening the network of Russian NGOs in Kyrgyzstan.

As the successor to the Soviet Union, Russia’s shared history with Kyrgyzstan also offers unique soft power opportunities. The celebrations of the 70th anniversary of victory in WWII have demonstrated the potential of this shared history to bring together millions of people in the CIS and beyond. Shared history could act as a foundation for Eurasian integration projects. For instance, the Immortal Regiment march united 12 million people around the world, including in Kyrgyzstan. It seems to me that Russia needs to do the following to make the most of its soft power in Kyrgyzstan:

- Flesh out the concept of Eurasianism to evoke clear associations (like the United States is associated with democracy and human rights). It is essential to emphasize that Eurasianism is not an ideological foundation for restoring the USSR;

- Promote scientific exchanges and the creation of analytical centers for applied studies in Central Asian countries (it would be good to open Russian think tanks in this region and get local experts involved). This will lay the ground for Russia’s foreign policy strategy and tactics, and make its NGOs more effective;

- Draft a long-term migration policy for the EAEU and conduct a large-scale media campaign to explain the positive influence of Russia’s demographic policy on the economies and societies of Central Asian countries;

- Elaborate a concept for using shared history to unite and mobilize large groups of people in Russia and far beyond;

- Popularize the Russian language by establishing language centers for guest workers, inviting teachers for hands-on training, setting up exchanges of school and university students, and working with young public opinion leaders (primarily in the IT sphere).

To sum up, Russia should be more active in using its soft power in Kyrgyzstan. It is important to remember that soft power instruments are expensive and designed for long-term and continuous use. 

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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