Challenging the West: Russia’s new Eurasian Union

Integration Project

By Mr. Rustam Rahimli MA degree on Russian StudiesBaku Slavic University

Eurasian Integration: The History• Agreement on Commonwealth of Independent States (CIS) –

Dec, 1991• Treaty on Increased Economic Integration, 1996• Agreement on Customs Union and Single Economic Space,

1999• Treaty on Eurasian economic community, 2000

• Adoption of Customs Code and application of unique external tariff, 2010

• Agreement on lifting internal border controls, July, 2012

• Agreement on Eurasian Union, 2011

• Establishment of Customs Union , Jan, 2010

• Establishment of Single Economic Space, Jan, 2012 (2015)

Eurasian Integration: The History

History in brief

December 9, 2010Declaration on the

Establishment of the Single Economic Space of Belarus, Kazakhstan and the Russian

Federation

Moving towards the establishment of the Eurasian Economic Union in order to achieve balanced, mutually

reinforcing and beneficial cooperation with other countries, international economic unions and EU with a

view to create a single economic space

November 18, 2011Declaration on Eurasian

Economic Integration

Desire to complete by January 1, 2015 codification of international Treaties that make up the regulatory legal framework of the Customs Union and Single economic union, thus laying groundwork for the future Eurasian

Economic Union.

March 19, 2012Declaration by the three

Presidents

Reaffirming commitment to establish the Eurasian Economic Union by 2015

The Stages of Eurasian Integration

The main documents of perspective Eurasian Union

• Treaty of Customs Union

• Codified Agreement on Single Economic Space

The Customs Union considers:

The Single Economic Space considers:

Structure of the Eurasian UnionSupreme Eurasian Economic Council

(Heads of State and Government of the Member States)

Eurasian Economic Commission

Council of the Commission three members of the Council, one Deputy PM representing each Member State

Board of the Commission

(nine members, three from each Member State) Chairman of the Board

Member of the Board-Minister in charge of the development of

integration and macroeconomics

Member of the Board–Minister in charge of economy and

financial policy

Member of the Board-Minister in charge of technical

regulation

Member of the Board-Minister in charge of trade

Member of the Board-Minister in charge of competition

Member of the Board-Minister in charge of industry and

agribusiness

Member of the Board -Minister in charge of energy

and infrastructure

Member of the Board-Minister in charge of the

customs cooperation

International actors of EAU project

• Member States:

Russian Federation Republic of KazakhstanRepublic of Belarus

• Candidate States: Republic of Kyrgyzstan, Republic of Tajikistan and Armenia

• Observer candidate: the Republic of Ukraine

Economic dimensions

• The impact of WTO• Energy dependency as a means of Integration• Economic Indications of EAU

The impact of WTO

• The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade among the participating countries.

• Founded: Jan, 1995

WTO members from Post-Soviet Countries:

Georgia – 2000, Ukraine – 2008, Russia - 2012

• Different tariff regulations of Customs Union and WTO, leads to implications for the harmonization of tariffs among the EAU member-states.

The impact of WTO

As a sample: By joining to the Customs Union, the Ukraine has to compensate the losses incurred by the other WTO members, an amount estimated at USD 1.9 billion.

Energy dependency as a means of Integration

But :

Since 1st of January 2012, gas price for Belarus lowered from USD 244 to USD 164 per 1000 cubic meters which led to USD 2, 0.000.000 (billion) annual benefit for Belarus. In return, Belarus sold the shares of state-owned oil company Beltansgaz corporation for 2.5 billion to the Gazprom where Russia gained control over 80% of gas network of Europe through the Ukraine.

Energy dependency as a means of Integration

• Kazakhstan – Russia energy deal:- Uzen – Atyrau – Samara oil pipeline – 1232 km- Caspian Pipeline Consortium – 1510 km

• Kazakhstan and other countries:- Kazakhstan – China ( Xinjiang) 2800 km- Baku – Tbilisi – Ceyhan – by tankers

Energy dependency as a means of Integration

Energy dependency as a means of Integration

• 25 % of whole Europe• 70% of Central Europe

Energy dependency as a means of Integration

All energy pipelines from Russia to Europe:

Druzhba pipeline network takes Russian oil through Belarus to Poland and Germany in the north and in the south through Ukraine to Central Europe and the Balkans, as well as to Italy.

Yamal pipeline carries natural gas through the Belarus to Poland & Germany. South Stream (through Black Sea) and Nord Stream (through Baltic Sea) pipelines

Economic Indications

• Russia in the ranking of:• International’s corruption perception index: 133rd • The World Bank doing business index: 112th • Heritage Foundation’s Index of Economic Freedom: 139th

Economic Indications

Economic Indications share in the global economy

• Collective Security Treaty Organization – CSTO• Rapid Reaction Forces• Russian’s military investments

Military dimensions

Collective Security Treaty Organization – CSTO

The Eurasian Union member – states co-ordinates their military and security services through the CSTO.

• Founded : 7th October, 2002

• Member-states: • Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan

• Annual Budget: 5.414.620.000 USD

Collective Security Treaty Organization – CSTO Structure

Council of Collective defence

Permanent Council

Council of Ministers of

Defence

Military Committee

Working Group on Afghanistan

Council of Ministers of

Foreign Affairs

Secretary General

Secretaries’ Committee of

security councils

Secretary of CSTO

Rapid Reaction Forces

Founded by the CSTO member states on 4th February, 2009. Based on 2 components:- Army component for resolution of armed and border conflicts- Special purpose troops for combating with terrorism and drug

trafficking ;

Russian investment in Military

• The Russian military bases in the Asia: - 3 military bases in Abkhazia- 1 military base in South Ossetia- Ground forces in Transnistra, Moldova- Infantry division in Tajikistan- Naval base in Sevastopol, the Ukraine- Also, some forces in Armenia, Kyrgyzstan & Tajikistan The intended investment in the military: Allocation in the amount of USD 800 billion for reform and rearm of the

Russian troops; Increasment the amount of Airborne from 7500 – 20.000 (by 2017)

Russian investment in Military 2002 – 2012 years: USD 755 billion

According to the statistics of 2013:

What does Eurasian Union integration project stands for ?

Eurasian Union Integration project is deemed for:

- Creating an independent pole in the perceived global multipolar system ;

- To eliminate the European expansion towards the Eastern Europe;

- To regain co-equal global leadership;

- Meet the Chinese economic challenges, primarily in Central Asia;

- Oppose the Islamist expansion into the Central Asia, North Caucasus, Siberia, the Urals and Volga region;

- To solid the energy dependency policy of the Europe by monopolizing the regional resources and etc. ;

Conclusion

• To sum up all the above, we could make the following

outcomes:- Russia’s new idea to create the Eurasian Economic Union is considered to

offer post - soviet states (besides, Baltic states) a “forced alternative” of the European Union which promises less successes.

- Unlike, the European Union, Eurasian Economic Union offers restricted sovereignty of member-states which cause disblief for such integration.

- Russian ruled Collective Security Treaty Organization will be less effective in Asia, unless China is not a member of this security organization.

- Generally, Russian investment in military serves for eradicating NATO influence to the Asia, as well as keeping the status – quo of “frozen” conflicts of the region.

References

http://www.ft.com/intl/cms/s/0/82d3917e-2a80-11e3-8fb8-00144feab7de.html#axzz2tlepcFRj

Blockmans, Steven: “Towards a Eurasian Economic Union: The challenge of integration and unity”, CEPS, Brussels, 2012

Adomeit, Hannes, Putin’s “Eurasian Union: Russia’s Integration project and policies on post-soviet space” , Kadir Has University, Turkey, 2012

Mowchan, John A: “Militarization of the Collective Security Treaty Organization” , U.S Army War College, USA, 2009

http://www.heritage.org/research/reports/2013/06/russias-eurasian-union-could-endanger-the-neighborhood-and-us-interests

Kasciunas, Laurynas: “Eurasian Union: a Challenge for the European Union and Eastern Partnership Countries”; Vilnius, 2012

http:// www.eurasiancommission.org/.../broshura26Body_ENGL_final2013_2.

Any questions ???