24 December 2014

Putin’s Eurasian Economic Union starts in 2015 with curtailed ambitions

The Washington Post: 24 December 2014
By Michael Birnbaum


Presidents of Kazakhstan Nursultan Nazarbayev, Belarus Alexander Lukashenko, Russia's Vladimir Putin at the Supreme Eurasian Economic Council, May 29, 2014.


It was to have been Russian President Vladimir Putin’s top foreign policy triumph: a grand alliance to rival the European Union, stretching from Ukraine to the Pacific.
On Tuesday, the leaders of four former members of the Soviet Union gathered in Moscow to discuss the final arrangements for a deal intended to draw their economies closer together. But with conflict engulfing Ukraine, the pact that will go into effect Jan. 1 falls short of Putin’s lofty vision, which would have given the Kremlin far more sway over its neighbors’ policies.

Instead, Putin is stitching together a partnership of skittish allies. Nations such as Kazakhstan and Belarus, both members of the new alliance, welcome the economic opportunities. But they fear winding up like Ukraine, where Russia helped fuel a conflict that has claimed 4,700 lives this year. Armenia is also set to join the alliance, known as the Eurasian Economic Union, and Kyrgyzstan is in talks to do so.
Putin once viewed the alliance as a way to rebuild some of the political and economic clout of the Soviet Union by centralizing political and economic policies in Moscow. European Union members have handed portions of their sovereignty to Brussels, the administrative capital of the E.U., under the theory that the 28 countries are more powerful together than individually.

Ukraine was to have been the jewel of Putin’s project, binding the country’s 45 million residents to economic development within Russia’s sphere. Putin’s aim was to restore some of the influence that was lost after the breakup of the Soviet Union. Ukraine had other ideas, though.
After heavy Kremlin pressure late last fall led then-President Viktor Yanukovych to abandon plans to move closer to the European Union, the streets of Kiev erupted in protests. In February, he was ousted. And on Tuesday, in Kiev, lawmakers voted to move a step closer toward the NATO Western defense alliance, precisely the opposite of Putin’s goal.

Shorn of Ukraine as a partner in the economic union, Putin annexed the country’s Crimean Peninsula in March and ignited the worst tensions between the West and Russia since the Cold War. Western sanctions have hit Russia’s economy hard. And the Kremlin’s retaliatory measure — a ban on imports of most Western food products — has hurt the idea of a borderless economic alliance, because countries such as Belarus and Kazakhstan aren’t interested in taking part in such a ban.
“We have just had a fairly active, very, I would say, stormy discussion of the details of our joint work,” Putin said in Moscow on Tuesday after meeting with the leaders of other prospective alliance members.

The alliance “will give an additional impetus to our economies, will become a powerful center of the entire region,” he said.
But Russia’s partners are fearful of a repetition of the Ukrainian violence in their nations and worried about Russia’s economic problems spreading over the border. Belarus and Kazakhstan have large ethnic Russian populations, the sort of presence the Kremlin has used to pressure neighbors when they fall out of line. Russia’s economy is also expected to contract next year, and the volatile ruble is down 40 percent this year against the dollar.

That has led Russia’s partners to be cautious about giving up sovereignty to the extent Putin would like. As if to show their independence and to thumb their noses at Putin, the leaders of both Kazakhstan and Belarus visited Kiev in recent days, and they announced programs to support Ukraine in an economic crisis that threatens to bankrupt the government.

In a visit to Kiev on Monday, Kazakh President Nursultan Nazarbayev called the conflict in Ukraine “nonsense” during a meeting with Ukrainian President Petro Poroshenko. The Kazakh leader announced that he would start shipping coal to Ukraine, which has faced a shortage because pro-Russian rebels have claimed key portions of coal-rich eastern Ukraine. He also said Ukraine’s and Kazakhstan’s defense industries would collaborate, an unusual slight to a powerful Russian industry.
“The current situation is not good for anyone. Keeping in mind that we have friendly relations with all countries, we can work with you on this issue,” Nazarbayev told Poroshenko, according to Nazarbayev’s press service. He said he would work to help end the Ukrainian conflict.

Belarusian President Alexander Lukashenko has also pushed hard against Putin, staking out an independent line even though his nation’s economy is very dependent on Russia’s. In his capital, Minsk, he has played host to negotiators from both sides of the conflict in eastern Ukraine, hoping to foster a lasting truce. More talks were expected to be held Wednesday and Friday.
“The conduct of our eastern brother cannot help but cause our concern today,” Lukashenko told his security council last week, referring to Russia.
Lukashenko’s tough words for Russia and a growing flirtation with the United States drew a warning this week from Alexei Pushkov, head of the foreign affairs committee of Russia’s lower house of parliament.
Pushkov referred to former leaders of Yugoslavia, Libya and Iraq, all of whom are now dead. They “tried to become friends with the United States,” Pushkov said on Twitter. “Their fate is well known. Now the U.S. is offering ‘new relations’ to Lukashenko. That is a dangerous experience.”
But even if Cold War-level tensions have overtaken some of Putin’s original hopes for the Eurasian union, the effort is still a Kremlin focus, analysts said.

The alliance is “another attempt to find a proper way to reunify, economically at least, this larger space,” said Fyodor Lukyanov, the head of a prominent foreign policy advisory group. “It wasn’t ever a restoration of the Soviet Union. This ambition didn’t exist. But to keep the common economic space and certain political institutions, that was the goal.”

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Michael Birnbaum is The Post’s Moscow bureau chief. He previously served as the Berlin correspondent and an education reporter.

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