Global Governance
EAEU - Quo Vadis?

A certain disillusionment with the Eurasian agenda should not automatically lead to an involution scenario, but it is necessary to change the centre of gravity in the very system of multifaceted Eurasian integration, which should not narrow to only economic interaction, writes Kubatbek Rakhimov, former adviser to the Prime Minister of the Kyrgyz Republic, PHD in economics, MBA.

As you know, there are three possible scenarios for any organic objects or processes: evolution, revolution and involution (the latter being forgotten by everyone). Accordingly, starting from this matrix, one can analyse the current state of Eurasian integration and possible scenarios for the development of the EAEU. 

Within the framework of the Central Asian conference of the Valdai Discussion Club, held in May 2021, various opinions were expressed on the development of cooperation between Russia and the countries of Central Asia, including forms of integration associations. The range of opinions was broad, the topic has been and will continue to be debatable.

In particular, the author of this article said in his report that the EAEU received a “knockdown” from a single international organisation — the World Health Organisation. “Nobody talks about knockout, but the term knockdown is the most accurate. In fact, under pressure from one international organisation (WHO), the common labour market and the movement of citizens within the union were paralyzed overnight, intra-union passenger and freight traffic was disorganised, restrictions on the export-import circulation of goods within the common market were imposed, and the tourism sector as well as the whole hospitality industry fell catastrophically. The GDP of the EAEU countries at the end of 2020 also showed a decline in absolute and relative terms.” In fact, the point is that the Eurasian Economic Commission was unable to offer its own version of joint action when it faced the pandemic, and subsequently recognised that there is no supranational bureaucracy as effective as a synergy of national bureaucracies and some general synchronised decisions.

Also at the conference in Kazan, the opinion was expressed that “Russia has recognised that there is agency there, but not regional, only local. Therefore, now the worries about the imbalance have subsided — we do what we can, we do not seek to jump over our heads. The same is with the EAEU: it is not possible to deepen integration, and it is not necessary — this means that the EAEU is pursuing a different path of evolution. Russia has resigned itself to the fact that the EAEU has stalled in an intermediate state, and, most likely, Uzbekistan, as an observer, will end its expansion.”

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On the other hand, there is a certain idea that the EAEU, as a geopolitical project of the Russian Federation, is directly related to the economic and geographical vector: “Over the next five to seven years, Russia will not be able to make a choice between two stratagems — to move to the South or to the North, outlining that space (we are not talking about political boundaries, but about civilisational and economic ones, and the latter are extremely important) where we can support stability and determine the rules of the game, primarily economic ones. Russia will gradually turn to one or the other, and after the choice is made, it will determine its policy for several decades at once.”

There was an interesting part where one could sense a certain emotional hue in relation to the actions of the Russian Federation in the integration processes: “Within the framework of the EAEU, Russia often fails to comply with the agreements it has concluded. It turns out that there are strategies, but no concrete deeds. There is a lack of sincerity in good-neighbourly cooperation between Russia and the Central Asian countries. The EAEU could be much more attractive.”

However, another, more optimistic point of view was voiced — that just recently a new atmosphere of trust has formed in the region, which has become an integral part of world processes. “Relations between Russia and Central Asia are determined not only by economic interaction, but also by close cultural and humanitarian ties, as well as mutual attraction. The Central Asian states traditionally view Russia as their most stable ally and partner. This, first and foremost, concerns security, trade and education.” This directly applies to Kazakhstan and Kyrgyzstan as members of the EAEU, Uzbekistan as an observer and Tajikistan as a potential observer in the EAEU or a member of the association in the medium term.

A number of preliminary conclusions can be drawn regarding the prospects for the development of Eurasian integration.

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The first conclusion is that the Eurasian integration is an evolutionary process. A possible “revolution” could be the Common Economic Space scenario along the lines of the 2013 model, when there was a chance for Ukraine’s full involvement in the common Eurasian economic space.

A number of studies on this topic have shown a serious economic gain for all parties, if the integration of Russia, Belarus, Kazakhstan, on the one hand, and Ukraine, on the other, would follow this scenario. In particular, it was concluded that “in terms of their scale, the economies of the CES republics and Ukraine in 2012 accounted for more than 3.4% of global GDP. It should be noted that this is more than the share these countries had achieved in world GDP by the end of the Soviet period (2.9% in 1990, according to World Bank estimates). Of course, the Soviet economy functioned in a completely different economic and price environment, and correct assessments of its contribution to the world economy are extremely difficult. However, we should recognise that by now the key states of the post-Soviet space have reached indicators that exceed the maximums of the Soviet period.” But in 2014-2015, Ukraine made a sharp geopolitical turn and, as a result, significantly reduced the volume of trade and mutual investments with the EAEU countries, and in the near future talks about its integration with Eurasia are meaningless.

In 2015, Armenia and Kyrgyzstan tentatively joined the troika (Russia, Belarus and Kazakhstan) in a working “evolutionary” mode. This entry of two small economies did not greatly affect the overall result in terms of GDP or volumes of foreign or domestic trade, but laid down elements of the erosion of the common external front in terms of the regime of exemptions, benefits and indulgences, which did not have the best effect on the atmosphere of relations between the troika. According to a number of analysts, the refusal of the joint synchronous accession of Russia, Belarus and Kazakhstan to the World Trade Organisation and the separate accession of the Russian Federation in 2012, Kazakhstan in 2015 and the still ongoing negotiations between Belarus and the WTO also did not contribute to the monolithic nature of the new integration association. Nevertheless, we have to admit that in general, despite the regimes of exemptions and restrictions, various trade and non-tariff barriers, as well as mechanisms to support domestic producers, the Eurasian economic integration ranks second in the world in terms of depth and coverage after the European Union, despite its evolutionary character.

The second conclusion is that it is necessary to be careful to prevent the involution (drying out) of Eurasian integration and to clearly identify a number of positions that will not be revised. This is due to the two main “fronts” of Eurasian integration — the Customs Union and, in fact, a single system of shared technical regulations. The scepticism about common Eurasian technological platforms and many beautiful, but unpromising projects has the right to exist and, in the event of an involutionary scenario, these projects will be sacrificed. This will happen also with the bureaucracy responsible for this in the Eurasian Economic Commission. At the level of Eurasian think tanks, it is possible and necessary to presume the aforementioned involutionary scenario based on pragmatism and geopolitical reality.

The third conclusion is that there will be no breakthrough, there are no grounds for this, and the evolutionary scenario requires constant monitoring and internal reforms. We can’t say that states with observer status in the EAEU (Moldova, Uzbekistan and Cuba) will quickly and easily exchange it for permanent membership due to many circumstances. Members of the Free Trade Zone with the EAEU (Serbia, Iran, Vietnam and Singapore) are also unlikely to consider options for full-fledged entry into the EAEU. That is, the attractiveness of joining the integration association is compromised, either due to a lack of complementarity between the economies, territorial dissociation not allowing for the effective development of cooperation, or on the desire among potential interested parties for membership to receive in return multibillion-dollar infusions from the Russian Federation on practically unrecoverable terms. For the weak economies of countries that were formerly part of the USSR, the common market is largely covered by the free trade zone agreement within the CIS.

With the most important partner of the EAEU countries, China, an interim Agreement on trade and economic cooperation has remained in force since 2018. Accordingly, within the evolutionary scenario, it is necessary to pay special attention to internal transformations and not to adhere dogmatically to the Treaty on the Eurasian Economic Union, but taking into account today’s geopolitical realities, to find the most effective forms of cooperation.

A certain disillusionment with the Eurasian agenda should not automatically lead to an involution scenario, but it is necessary to change the centre of gravity in the very system of multifaceted Eurasian integration, which should not narrow to only economic interaction. Moreover, political integration within the EAEU may well follow a “spotted” scenario, using the experience of the Union of Russia and Belarus, which received a new impetus for development amid the new geopolitical conditions of “Cold War 2.0”.

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