13 December 2012, 11:57

Putin’s Eurasian Union: mutually beneficial enterprise, not a hegemonic venture

Putin’s Eurasian Union: mutually beneficial enterprise, not a hegemonic venture

With the eventual goal to set up a Eurasian Union by 2015, Russia, Belarus, and Kazakhstan continue to follow the course of intensive economic integration facilitating the free movement of services, capital, workers, and goods among the member states. Meanwhile, Western observers express severe concerns regarding the looming prospect of the emergence of the new economic and political hegemon. Robert Schoenberg, a research fellow form the Institute of Middle East, Central Asia, and Caucasus Studies, UK, tells Voice of Russia that these concerns are greatly overblown.

Ever since October 2011 when Vladimir Putin first announced his plans and aspirations for the creation of the Eurasian Union, foreign observers have continually viewed the project as a veiled Russian attempt to ‘re-Sovietize’. Contra to the common Western perception, Robert Shoenberg suggests that such accusations are greatly overblown and follow from the profound misunderstanding of Putin’s intentions. Mr Shoenberg contends that “Moscow has long since abandoned any missionary ideology and the Russian political elite have no interest in keeping all fourteen post-Soviet countries in its orbit. Subsidizing its neighbour states through cheap loans and fuel in order to gain political concession is no longer an option for Russia. Putin clearly realises that Russia’s profound influence on its neighbouring countries can only be achieved if it is beneficial to all parties and is not based on coercion or brute political pressure”.

In this sense, the Customs Union – the first step towards a full Eurasian Union – should not be seen as Moscow’s attempt to build the second Russian empire. Belarus and Kazakhstan, the two states which together with Russia joined the Union early this year, retain a proportionate control over the decision-making process and their sovereignty is by no means curtailed by the new arrangement. With Russia serving as a natural centre of gravity, the Eurasian Union initiative aims at enhancing economic prospects of the entire post-Soviet region.

Mr Shoenberg suggests that the Eurasian Union is an especially significant development if viewed from the perspective of global trends of regional integration. With the regional integration proceeding in much of the world through such arrangements as NAFTA, ASEAN, and EU, the post-Soviet space still remains largely on the margins. A profound isolation from global markets and a lack of horizontal trading links only contribute to the region’s persistent economic backwardness. Within this context, the Eurasian Union presents a unique opportunity for the post-Soviet states to create a huge single market with low trade barriers and a freer movement of goods and labour across borders. The Union will also allow member states to concentrate on areas in which they have comparative advantage which will greatly reduce the costs of production.

For Mr Shoenberg, these undeniable benefits of the Eurasian Union far outweigh the potential losses of cooperation. Crucially, Mr Shoenberg admits that “by reinforcing its status as the Union’s financial centre, over time Russia will inevitably gain immense economic and political benefits. At the same time, however, in the long run, each prospective member of the Union will come out better than it would without cooperation”. For Belarus, opening up borders for the Russian goods and capitals will eventually lead to the deconstruction of the current command-and-distribution model of the economy. For Kazakhstan, cooperation with Russia will not only increase capital inflow into the country and contribute to the growth of such Kazakh exports as coal and metal, but will also enable it to protect itself from dangerous political and economic expansion of China. More generally, integration will allow participating states to improve their citizens’ standards of living through a wider common union job market and other social benefits that Russia’s neighboring economies are not able to provide for their domestic constituencies alone.

Mr Shoenberg also notes that “from an institutional standpoint, the decision-making process within the newly emerging Eurasian Union is increasingly transparent”. Indeed, under the Regulations which govern the Customs Union arrangement, member states are obliged to publish their formal decisions in the media accessible to the general public. Mr Shoenberg expects that such demands for transparency will eventually lead to the formation of a long-term trustful relationship between the member states, subsequently making the Eurasian Union an extremely effective venture.

One has to admit, however, that the project will be not only economically effective but will also lead to deeper political association between the member states. Mr Shoenberg argues that “the Union will increase both economic and political stability in the region and provide an arena for settlement of various local conflicts”. In this respect, member states can be expected to become not only partners in their economic ventures but also natural allies in their political affairs.

Following this line of reasoning, Mr Shoenberg claims that “without any positive or negative judgement, Putin’s initiative will ultimately lead to the creation of an alternative form of the international ordering”. According to Mr Shoenberg, due to series of economic crises that the world has been witnessing since 2008, the present international order led by the Unites States and the European Union is in relative decline while the rising economies of Brazil, Russia, India, and China come to form alternative power centres. Within such multipolar world, economic and political stability can be achieved only through sufficiently large and powerful political and economic groupings such as the Eurasian Union. Crucially, the Union should not be automatically perceived as an imminent threat to the US and EU. Mr Shoenberg suggests that contra to the popular fears, in the near future Eurasian Union can actually help both US and EU to ensure their relative positions in the international system and become a strong ally of the West. In this sense, Vladimir Putin’s Eurasian Union initiative can indeed be viewed as a mutually beneficial enterprise rather than a hostile hegemonic venture.

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