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WHERE THREE IS A CROWD
The Economist
May 30 2014
May 30th 2014, 12:50 by D.T. | MOSCOW
THE oversized table in Astana's Palace of Independence could seat
delegations from at least 15 former Soviet republics. But it was only
set for three. Much to the disappointment of the assembled strongmen,
Ukraine--long seen as crucial to the party--didn't show up.
Nonetheless, the three founding members of the customs union--Russia,
Belarus and Kazakhstan--signed a treaty on May 29th paving the way
for the Eurasian Economic Union (EEU) to be wheeled out on January 1st.
Its resource-rich constituent economies have a GDP of $2.7 trillion
economy to support a population of 170m. The EEU was supposed to be a
counterweight to the European Union and the West. That is now looking
unlikely. Still its establishment will mark a diplomatic triumph for
Vladimir Putin.
It has been a nail-biter for the EEU over the past few months. The
leaders of Belarus and Kazakhstan, with their eyes on the violence in
Ukraine and Russia's part in it, had put the brakes on a project that
many call Mr Putin's attempt to rebuild the Soviet Union. Alexander
Lukashenko and Nursultan Nazarbayev, the presidents of Belarus and
Kazakhstan respectively, have shown concern that tying themselves to
an imperialistic Russia, whose economy has been subjected to economic
sanctions and is starting to drift into recession, may not be in
their best interests.
The membership of Ukraine, the second-largest of the 15 post-Soviet
states, was long seen as being needed to diversify the EEU. To some
extent it could have balanced the energy producers, and offset Russian
dominance. In the fall of 2013 Russian pressure on Ukraine to join the
EEU, and to snub a corresponding agreement with the European Union,
helped inspire the EuroMaidan protests that brought down Viktor
Yanukovych's government and eventually spun into the strife that is
now roiling the east of Ukraine.
Mr Lukashenko was most direct: "We lost someone, Ukraine...for Ukraine,
the burden was too heavy," as Reuters quoted him. "Sooner or later
the Ukrainian authorities will know where happiness is."
Yet not everyone in Kazakhstan is happy. Outside the signing ceremony
in the country's ostentatious new capital, police arrested dozens of
protesters who were wearing surgical masks and waving placards. Some
of their signs implored onlookers to "Protect Yourself from Russia's
Imperial Virus!"
Almost a quarter of Kazakhstan's population is ethnic Russian,
meaning Mr Putin's pretext for annexing Crimea--that is, protecting
Russian nationals and people who speak Russian--could arguably apply
there, too.
Days before the three leaders sat down to sign the document, Kazakh
officials bragged that they had succeeded in keeping the final treaty
purely economic; they removed provisions for a common currency,
citizenship and border force. Mr Nazarbayev, who likes to trumpet his
country's "multi-vector" foreign policy and enjoys hefty investment
from China, has said that Kazakhstan would not cede "one iota" of
sovereignty by joining the EEU.
That has the effect of underscoring questions about what exactly Mr
Nazarbayev signed. The final version of the 900-page treaty was not
published until after he put his name on it. The activists had called
for a referendum, but Mr Nazarbayev ignored them.
How the EEU's customs union, which was founded in 2010, has benefited
Kazakhstan is also unclear. Kazakh businessmen complain that the
Russian market remains difficult to enter. Earlier this month,
the Eurasian Economic Commission, as it is called, said trade among
the three member-states had fallen nearly 13% in the first quarter,
year-on-year, according to the Russian daily Kommersant. The commission
said this was an anomaly, but it does draw attention to the effects a
slowing Russian economy will have on the other new members of the EEU.
Despite all this, the EEU as an alternative to the EU makes sense
for a certain type of post-Soviet leader. After all, most of them are
uninterested in political reform; no one is hounding them for change.
Mr Putin promises "a powerful and attractive economic development
centre, a major regional market" that will draw in "large-scale trade
from Europe and Asia." At the very least, the treaty allows Mr Putin
to show the world he has alternatives to engagement with the West.
Two other formerly Soviet countries are undeterred by Russia's
aggression. Unfortunately for the fledgling economic union, they
are among the poorest. Armenia has prepared to join at lightning
speed ever since President Serzh Sarkisian shocked EU negotiators
in September by announcing that his country too was backing out of
a proposed association agreement. Isolated by its festering military
conflict with neighbouring Azerbaijan, Armenia is dependent on Russia
for military and economic support.
Kyrgyzstan, which hopes to join by the end of the year and says it
has received promises of $1.2 billion in Russian help, has found the
customs union already choking its re-export trade of Chinese goods.
Rather than remain walled-off from its traditional buyers, Kyrgyzstan's
president has said his country has little choice but to join.
That's too bad. Russia is not omnipotent. A few days after Russian
energy giant Gazprom took over Kyrgyzstan's gas network in April,
neighbouring Uzbekistan turned off the tap. The Uzbeks are said to
have been angered by Russia's growing presence in Kyrgyzstan. So
southern Kyrgyzstan has been without gas since April 14th.
http://www.economist.com/blogs/banyan/2014/05/introducing-eurasian-economic-union
The Economist
May 30 2014
May 30th 2014, 12:50 by D.T. | MOSCOW
THE oversized table in Astana's Palace of Independence could seat
delegations from at least 15 former Soviet republics. But it was only
set for three. Much to the disappointment of the assembled strongmen,
Ukraine--long seen as crucial to the party--didn't show up.
Nonetheless, the three founding members of the customs union--Russia,
Belarus and Kazakhstan--signed a treaty on May 29th paving the way
for the Eurasian Economic Union (EEU) to be wheeled out on January 1st.
Its resource-rich constituent economies have a GDP of $2.7 trillion
economy to support a population of 170m. The EEU was supposed to be a
counterweight to the European Union and the West. That is now looking
unlikely. Still its establishment will mark a diplomatic triumph for
Vladimir Putin.
It has been a nail-biter for the EEU over the past few months. The
leaders of Belarus and Kazakhstan, with their eyes on the violence in
Ukraine and Russia's part in it, had put the brakes on a project that
many call Mr Putin's attempt to rebuild the Soviet Union. Alexander
Lukashenko and Nursultan Nazarbayev, the presidents of Belarus and
Kazakhstan respectively, have shown concern that tying themselves to
an imperialistic Russia, whose economy has been subjected to economic
sanctions and is starting to drift into recession, may not be in
their best interests.
The membership of Ukraine, the second-largest of the 15 post-Soviet
states, was long seen as being needed to diversify the EEU. To some
extent it could have balanced the energy producers, and offset Russian
dominance. In the fall of 2013 Russian pressure on Ukraine to join the
EEU, and to snub a corresponding agreement with the European Union,
helped inspire the EuroMaidan protests that brought down Viktor
Yanukovych's government and eventually spun into the strife that is
now roiling the east of Ukraine.
Mr Lukashenko was most direct: "We lost someone, Ukraine...for Ukraine,
the burden was too heavy," as Reuters quoted him. "Sooner or later
the Ukrainian authorities will know where happiness is."
Yet not everyone in Kazakhstan is happy. Outside the signing ceremony
in the country's ostentatious new capital, police arrested dozens of
protesters who were wearing surgical masks and waving placards. Some
of their signs implored onlookers to "Protect Yourself from Russia's
Imperial Virus!"
Almost a quarter of Kazakhstan's population is ethnic Russian,
meaning Mr Putin's pretext for annexing Crimea--that is, protecting
Russian nationals and people who speak Russian--could arguably apply
there, too.
Days before the three leaders sat down to sign the document, Kazakh
officials bragged that they had succeeded in keeping the final treaty
purely economic; they removed provisions for a common currency,
citizenship and border force. Mr Nazarbayev, who likes to trumpet his
country's "multi-vector" foreign policy and enjoys hefty investment
from China, has said that Kazakhstan would not cede "one iota" of
sovereignty by joining the EEU.
That has the effect of underscoring questions about what exactly Mr
Nazarbayev signed. The final version of the 900-page treaty was not
published until after he put his name on it. The activists had called
for a referendum, but Mr Nazarbayev ignored them.
How the EEU's customs union, which was founded in 2010, has benefited
Kazakhstan is also unclear. Kazakh businessmen complain that the
Russian market remains difficult to enter. Earlier this month,
the Eurasian Economic Commission, as it is called, said trade among
the three member-states had fallen nearly 13% in the first quarter,
year-on-year, according to the Russian daily Kommersant. The commission
said this was an anomaly, but it does draw attention to the effects a
slowing Russian economy will have on the other new members of the EEU.
Despite all this, the EEU as an alternative to the EU makes sense
for a certain type of post-Soviet leader. After all, most of them are
uninterested in political reform; no one is hounding them for change.
Mr Putin promises "a powerful and attractive economic development
centre, a major regional market" that will draw in "large-scale trade
from Europe and Asia." At the very least, the treaty allows Mr Putin
to show the world he has alternatives to engagement with the West.
Two other formerly Soviet countries are undeterred by Russia's
aggression. Unfortunately for the fledgling economic union, they
are among the poorest. Armenia has prepared to join at lightning
speed ever since President Serzh Sarkisian shocked EU negotiators
in September by announcing that his country too was backing out of
a proposed association agreement. Isolated by its festering military
conflict with neighbouring Azerbaijan, Armenia is dependent on Russia
for military and economic support.
Kyrgyzstan, which hopes to join by the end of the year and says it
has received promises of $1.2 billion in Russian help, has found the
customs union already choking its re-export trade of Chinese goods.
Rather than remain walled-off from its traditional buyers, Kyrgyzstan's
president has said his country has little choice but to join.
That's too bad. Russia is not omnipotent. A few days after Russian
energy giant Gazprom took over Kyrgyzstan's gas network in April,
neighbouring Uzbekistan turned off the tap. The Uzbeks are said to
have been angered by Russia's growing presence in Kyrgyzstan. So
southern Kyrgyzstan has been without gas since April 14th.
http://www.economist.com/blogs/banyan/2014/05/introducing-eurasian-economic-union