Outgoing Russian president Dmitri Medvedev has given impetus to the Eurasian Union by declaring that it will be up and running in three years.

An idea that has been around the block several times, the union would encompass Belarus, Kazakhstan, Kyrgyzstan and Tajikistan and have as observer countries Armenia, Moldova and Ukraine. The union would be one of a myriad of regional initiatives set up in the post-Soviet space. Whether there will be meaningful integration remains doubtful.

Analysis

The question is, can it work? For this economic union to be more than just a space through which goods pass and resources are extracted, meaningful economic liberalization is necessary and the issue of corruption and nepotism must be aggressively tackled. Many regional groupings have been set up and swiftly forgotten about. Will this be different?

Russia’s vision for the Eurasian Union is to forge itself as an economic land bridge at the center of major global supply chains, linking production and consumption. In so doing, Russia stands to become Asia’s window to the West and Europe’s gateway to the East. If successfully implemented, Russia would gain significant geopolitical clout and the opportunity to capitalize from economic diversification and technology transfers from firms seeking to maximize production and distribution efficiencies in Russia.

Russian minister of economic development Elvira Nabiullina laid out this vision when she said, “The Customs Union and Common Economic Space on this map are a block with economically and geographically advantageous location between the traditional production and consumption centers (Europe) and the main centers of the promising global growth.”

Forming an effective economic union between countries of the former Soviet Union will be hamstrung by domestic networks of corruption and nepotism. To avoid the domination of Russian interests, Central Asian countries will play Russia against Chinese economic interests and Eastern European countries will continue to vacillate between Russia and Western European interests.

Furthermore, it may prove to be a tough sell to non-Russian populations, in the post-Soviet space, that their countries will not simply be junior partners in orbit around Kremlin interests. Very likely, the Eurasian Union will begin primarily as an energy infrastructure bloc with limited customs liberalization, and some regulation of migrant workers’ visas into Russia.

The European Union has been floated as a possible model for the Eurasian Union but this ignores the fact that the European Union was founded by a few states of roughly equal strength. The simple physical and economic dominance of Russia means that it will want to play the leading role — an unappealing idea to the other members. Establishing a free-trade zone, which could be a possible first step toward unification, raises the specter of Russian products being dumped on less developed markets.

Of course, this analysis assumes that the idea actually goes anywhere. Belarus and Russia are technically in a union but there is precious little evidence of it. The possible benefits are clear for Russia but it is difficult to see what the other prospective member states would gain from the Eurasian Union. Indeed, some states, such as Turkmenistan, have been pursuing policies at odds with the Kremlin. Their freedom may well be limited by a tighter Russian embrace.

Additionally, the kind of liberalization required for global economic integration (with Europe and China, for example) may prove to be destabilizing for several of the Central Asian regimes and turbulent for Russian domestic society. Integration necessitates legal reform and the entrenchment of transparent institutions that can facilitate economic and social activities. This may partially explain the seeming lack of enthusiasm on the part of Central Asian authoritarian regimes to the idea of a union.

Over the last two decades, many regional organisations have been set up in a sometimes overt attempt to tie Chinese influence into some kind of institutional framework. The Commonwealth of Independent States is the closest thing to a forebearer of the Eurasian Union but on occasion, member states don’t even bother turning up to its meetings. There is already a Eurasian Economic Community with freedom of movement and a common economic space.

On a practical level, there is thus no obvious need for a Eurasian Union. The proposed forms of integration can all be pursued through preexisting structures. The strength of the union as a concept lies in its political appeal.

The entire project encapsulates Vladimir Putin’s various ideas on Russian identity. While using some European institutions as a model, he is avowedly stepping away from greater cooperation. Putin has always opposed societal movements such as “Russia for the Russians,” preferring instead to conceive of Russia as a multiethnic, multinational state. This union firmly places Russia within the context of its previous land based empire, though claims of neo-Soviet expansionism are of course overblown.

Not just an economic land bridge, the Eurasian Union, if it ever gets off the ground, would be a powerful example of Russia as a third way between Europe and Asia. Facing public discontent on an unprecedented scale, Putin needs something compelling for his third term. This project helps to restore Russians’ sense of their place in the world, while also checking the growing nationalist trend by partially restoring Russia’s overt dominance. There will probably be few tangible results of this call for union, except for Putin.

Wikistrat Bottom Lines

Opportunities

• Russia would increase relations over their former satellite states in an effort to improve their own economy and image abroad.
• There could be a potential for an increased market in Eastern Europe and Central Asia that wouldn’t typically be accessed through conventional means.
• It could certainly help shore up Putin’s domestic position and cut off nationalist opposition.

Risks

• Belarus’ dictatorial style of government and Russia’s “managed democracy” may be a hindrance to progress within the proposed union.
• Letting in the candidates Kyrgyzstan and Tajikistan, which have recently had problems with civil unrest, could be a stumbling block to their entry.
• Europe may see a joining of the former Soviet states as a potential hostile environment, both in an economic and political context.
• China could see the union as a threat to its influence in the region, e.g. gas purchases.
• Having control of these territories was a burden to the USSR. Having an influence will also be costly.

Dependencies

• The formation of the union will depend on Russia’s continued relationship with its former satellite states, especially Kazakhstan, which first proposed the idea.

Thomas Barrett, Michael Breen, Michael Moreland and Graham O’Brien contributed to this analysis.