Russia’s Post-Soviet Economic Integration Policy

With U.S. troops in Afghanistan and Central Asia, as well as NATO’s advancing eastward expansion, in order to secure its own strategic interests, Russia, and China must unite their forces to exclude the influence of the United States from Central Asia. Their overlapping security interests in Central Asia are visible in the Shanghai Cooperation Organization (SCO), with the aim of acting as a counterweight to U.S. power as well as to other forms of

instability such as regional disputes, drug trafficking, transnational organized crime, and all other kinds of security concerns. ¹⁹⁹

The idea for the establishment of a "stabilization arch" put forward by Putin shows the basic spirit and strategic motive of Russian diplomatic policy initiatives in essence. However, due to its concern that China’s penetration into Central Asia might be too deep, the SCO is seen merely an auxiliary mechanism for Russia’s strategic presence in Central Asia. ²⁰⁰

4.2.4.3 Russia’s Post-Soviet Economic Integration Policy

4.2.4.3.1 Mechanisms of the Commonwealth of Independent States (CIS)

The CIS’ multilateral framework greatly depends upon diplomacy and traditional power mechanisms; hence regional integration under the CIS framework has not met with success vis-à-vis Russia’s core economic integration strategy.

Xinjiang’s philosophy and social science network, May 16, 2012, available at:

http://big5.xjass.com/zy/content/2012-05/16/content_232498.htm, (accessed: 20131201).

199 新大賽局」，蔡振雄-大學碩士論文清雲科技，「印三國在中亞地區的競逐、中、俄 (桃園：2010 年

7 月) ，頁 27-99。[Tsai, Chenshiung. Xin Dasaiju -E、Zhong、Yin Sanguo Zai Zhongyadiqu De Jingzhu (The New Great Game-The Rivalry between Sino-Russia and India in Central Asia), unpublished thesis, Ching Yun University, (Taoyuan: July 2010), pp. 27-99.]

200 新大賽局」，蔡振雄-大學碩士論文清雲科技，「印三國在中亞地區的競逐、中、俄 (桃園：2010 年

7 月) ，頁 27-99。[Tsai, Chenshiung. Xin Dasaiju -E、Zhong、Yin Sanguo Zai Zhongyadiqu De Jingzhu (The New Great Game-The Rivalry between Sino-Russia and India in Central Asia), unpublished thesis, Ching Yun University, (Taoyuan: July 2010), pp. 27-99.]

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Russia promotes efforts towards greater integration with the Central Asian countries that had been former republics within the USSR. Initially these efforts utilized mechanisms within the framework of the Commonwealth of Independent States (CIS). Due to the fact that CIS multilateral framework greatly depended upon diplomacy and traditional power mechanisms, regional integration under the CIS framework has not met with success vis-à-vis Russia’s core economic integration strategy. Therefore, in order to more pragmatically develop economic cooperation with the states of the region, Russia has been more inclined to establishing bilateral cooperative mechanisms putting effort in stabilizing smaller, sub-regional groupings. Thus, on the 29^th of March, 1996 a “Customs Union of Belarus, Kazakhstan, and Russia” came into being within the CIS framework, which was later joined by Kyrgyzstan joined in December of 1996 and Tajikistan in 1997. However, efforts to promote that throughout the CIS met with resistance. Nonetheless, this small subgrouping formed the early forerunner for later integration attempts. ²⁰¹

4.2.4.3.2 The Eurasian Economic Community (EAEC, also referred to as “EurAsEC”)

202

On October 10th, 2000, the Eurasian Economic Community (EAEC) was created by a treaty signed by Belarus, Kazakhstan, Russia, Kyrgyzstan and Tajikistan. The economic community also has aimed for, and partially achieved, economic integration and a custom’s union. In 2005 the member states reached an agreement on the establishment of a customs union, the Eurasian Customs Union (ECU), which came into being on the 6th of October, 2007. In January of 2008, the Intergovernmental Council of the Eurasian Economic Community (EAEC) took place in Moscow.

After Putin’s accession to the presidency, Russia’s push towards greater economic and some degree of political integration was given greater impetus and a new formulation was created.

201 ‘Eurasian Economic Integration: Facts and Figures’, Eurasian Economic Commission, 2013,available at:

http://www.eurasiancommission.org/ru/Documents/broshura26Body_ENGL_final2013_2.pdf, (accessed:

20140519).

202 Dragneva, Rilka and Kataryna Wolczuk. “Russia, the Eurasian Customs Union and the EU:Cooperation, Stagnation or Rivalry?,” Chatham House | The Royal Institute of International Affairs, Aug 2012, available at:

http://www.chathamhouse.org/sites/default/files/public/Research/Russia%20and%20Eurasia/0812bp_dragnevaw olczuk.pdf, (accessed: 20140105).

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On October 10^th, 2000, the Eurasian Economic Community (EAEC) was created by a treaty signed by Belarus, Kazakhstan, Russia, Kyrgyzstan and Tajikistan. The economic community also has aimed for, and partially achieved, economic integration and a custom’s union. The EAEC improved upon the prior CIS framework in a number of ways, including binding all signatories to its agreements by seeking to coordinate ratification and prohibit reservations, as well as creating a permanent executive office, the Integration Council. More importantly, the EAEC’s founding treaty provided for improved dispute resolution through the setting up of a special court. ²⁰³

Step by step this economic community has continued to develop. In 2003 the Eurasian Economic Community member states signed “The energy policy fundamentals of Eurasian Economic Community member states,” representing a system of concepts officially adopted in these states with regard to goals, objectives, guidelines, basic trends, and arrangements for implementation of EAEC member states’ energy policies. In 2005 the member states reached an agreement on the establishment of a customs union, the Eurasian Customs Union (ECU), which came into being on the 6^th of October, 2007. In January of 2008, the Intergovernmental Council of the Eurasian Economic Community (EAEC) took place in Moscow and the Prime Ministers of Belarus, Kazakhstan and Russia signed nine agreements during that meeting within the framework of the Eurasian Economic Community. However, the Uzbekistan government decided to withdraw from the Eurasian Economic Community in November 2008.

4.2.4.3.3 The Eurasian Economic Community Customs Union (“Eurasian Economic Union”) ²⁰⁴

Again on the 5^th of December, 2009, the leaders of Belarus, Kazakhstan and Russia met agreeing to launch a new customs union on 1^st of January, 2010, which was then established.

203 “Agreement on foundation of Eurasian economic community (EAEC),” World Integrated Trade Solution (WITS), available at: http://www.worldtradelaw.net/fta/agreements/eaecfta.pdf, (accessed: 20140510).

204 Dragneva, Rilka and Kataryna Wolczuk. “Russia, the Eurasian Customs Union and the EU: Cooperation, Stagnation or Rivalry?,” Chatham House | The Royal Institute of International Affairs, August 2012, available at:

http://www.chathamhouse.org/sites/default/files/public/Research/Russia%20and%20Eurasia/0812bp_dragnevaw olczuk.pdf, (accessed: 20140105).

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205 This economic community was further augmented in July 2011, by the elimination of internal physical border controls, and on November 18^th, 2011 a joint commission was set up, the Eurasian Economic Commission, whose aim it is to set up the “Eurasian Economic Union”

by 2015. ²⁰⁶ This process so far has culminated in the creation of a “Common Economic Space” on January 1^st, 2012 that is currently acceded to by Belarus, Kazakhstan, and Russia.

The current EAEC and the proposed Eurasian Economic Union are considered by Russia as mechanisms by which they may integrate the post-Soviet space and Russia has been actively promoting the Eurasian Economic Union as an alternative to the EU’s integration mechanisms.

Its rules are consistent with the World Trade Organization (WTO) and other international norms. Subsequently, Russia, Belarus and Kazakhstan continue to promote enlargement of the future Eurasian Economic Union within a more diverse framework for further economic integration. With three years of development, the Eurasian Economic Union should be launched on the 1st of January, 2015.

On May 29^th, 2014, in Astana, Presidents Putin, Nazarbayev and Lukashenko, of Russia, Kazakhstan and Belarus respectively, signed the Treaty on the Eurasian Economic Union. ²⁰⁷ Subsequently, it was stated that Armenia would sign and join the EurAsEU on June 15^th of 2014, with Kyrgyzstan joining sometime in 2015. ²⁰⁸

4.2.4.3.4 CISFTA (Commonwealth of Independence States Free Trade Agreement)

The CISFTA was signed on the 18^th of October, 2011 among eight CIS member states: Russia, Ukraine, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Moldova and Armenia.CISFTA aims to promote the free movement of goods under certain conditions. Uzbekistan’s president

205 “Russia, Belarus and Kazakhstan agree on customs union,” Journal Of Turkish Weekly, Dec 5, 2009, available at:

http://www.turkishweekly.net/news/93507/russia-belarus-and-kazakhstan-agree-on-customs-union.html, (accessed: 20140510).

206 “Russia, Belarus, Kazakhstan sign pact,” United Press International, Nov 19, 2011, available at:

http://www.upi.com/Top_News/World-News/2011/11/19/Russia-Belarus-Kazakhstan-sign-pact/UPI-1522132174 8054, (accessed: 20140510).

207 “Treaty on Eurasian Economic Union signed,” President of Russia, May 29, 2014, available at:

http://eng.kremlin.ru/news/22399, (accessed: 20140529).

208 Panfilova, Viktoria. “Eurasian Economic Union Founding Treaty Signed,” Jun 3, 2014, available at:

http://journal-neo.org/2014/06/03/rus-dogovor-o-sozdanii-evrazijskogo-e-konomicheskogo-soyuza-podpisan,

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Islam Karimov also decided to join the CIS free trade zone in December 2013 ²⁰⁹

In December of 2011 Russian President Vladimir Putin was elected again, and Russia significantly accelerated the pace of integration within the CIS, and is actively promoting the proposed Eurasian Union through its framework, having become Putin’s first priority strategic mission. ²¹⁰