Expecting new turn in post-Soviet integration

Photo: Expecting new turn in post-Soviet integration / Kazakhstan

Baku, Azerbaijan, May 23
By Elena Kosolapova - Trend:

Russian President Vladimir Putin's pet project on integration of the post-Soviet space will get a new upgrade form in late May.

Russian, Kazakh and Belarusian presidents will sign the Eurasian Economic Union treaty which should come into force on January 1, 2015 on the basis of the existing Customs Union and Common Economic Space of these three countries on May 29.

In spite of some unresolved issues concerning the rules of the future union the presidents decided not to delay its creation and agree on the vexed points following the start of its functioning.

Nevertheless the initiatives on creation of supranational authorities of the Eurasian Economic Union and common currency introduction proposed by Russian officials were delayed to a long-term period. Moreover some experts believe they will never be implemented since Kazakhstan and Belarus are skeptical about them.

Meanwhile the Eurasian Economic Union treaty does not envisage elimination of all the duties and equal access to Russian gas and oil pipelines for all the member states of the Union as Belarus and Kazakhstan insisted.

Currently Belarus returns over $3 billion export duties for oil products produced from imported Russian oil to Russia. The elimination of all the duties within the Eurasian Economic Union's borders will mean that these duties remain in Belarusian budget.

Kazakhstan exports the majority of its hydrocarbon which is the main source of its income through Russia's territory. The access to Russian pipelines will allow this country to launch direct gas supplies to Europe without any intermediaries and make oil supplies in this direction more profitable. Such prospect should also be very attractive for Europe since it favors to its policy on the diversification of the hydrocarbons suppliers.

Earlier Russian experts counted that if all trade restrictions are lifted in 2015 after the union is created, Russian budget losses will hit $30-40 billion and decided that such "subsidies" to its partners would be very heavy. So Russia sought delay of these rules and Kazakhstan and Belarus agreed to wait.

The assessments of aims and results of the Eurasian Economic Union are greatly differing.

The U.S. believes that any unions in the post-Soviet space will be controlled by Russia and pose a threat for independence of other member-countries.

In late 2012 then Secretary of State Hillary Clinton said that Russia recreates a new version of the Soviet Union under the ruse of economic integration and the U.S. goal is to figure out effective ways to slow down or prevent it.

Kazakhstan and Belarus expects that the Union will be purely economic with no political powers. Kazakhstan rich in natural resources but having no access the sea plans to become closer to Europe thanks to the customs free regime with Russia and be a bridge between the East and the West. Belarus will receive cheap hydrocarbons from its partners and have new markets for its products within the Union. Three more countries which are going to join the Customs Union of Russia, Kazakhstan and Belarus also wants to get economic preferences and access to labor market of these countries and especially Russia.

Armenia has already approved the road map for joining the Customs Union, the Kyrgyz government plans to approve it in several days and Tajikistan plans to join the Union following Kyrgyzstan, when it will have common border with it.

The Customs Union during three years since its creation indeed brought economic results. The trade turnover between its member-countries increased by 30 percent, Putin said in late 2013. Meanwhile, for example Kazakhstan's turnover within the Union increased by 88 percent from 2009 to 2013. Foreign direct investment in Kazakh economy rose by 34 percent and direct investment in Kazakh manufacturing industry increased by more than 90 percent in this period.

Russia says that the Eurasian Economic Union is focused at integration in Eurasia and will be similar to the EU. Meanwhile many experts believe that in any union in the post-Soviet space all the member countries will be under Russian influence. However some of them note that it will happen not even due to Russian political pressure but due to the volume of its economy compared to the volumes of economies of other member states.

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