Sunday

15th Sep 2019

Column / Crude World

Why countries are not rushing to join Putin's union

  • Putin (c) with Laotian PM Thongloun Sisoulith (l) and sultan of Brunei Darussalam Hassanal Bolkiah (r). He claims ASEAN countries support integration with the Eurasian Economic Union. (Photo: kremlin.ru)

During the ASEAN-Russia summit held in Sochi from 19-20 May, Russian president Vladimir Putin claimed ASEAN member states voiced their support for integration with the Eurasian Economic Union (EEU).

The diplomatic value of such a statement at a time of Russian relative isolation notwithstanding, there are ample reasons to take this statement with a grain of salt.

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Now at about one-and-a-half year into its existence, the EEU is rapidly turning into a flawed motor of regional integration.

After failing to entice Ukraine to join the bloc in 2014, Russia firmly turned the screws on its neighbour by annexing Crimea and stoking conflict in eastern Ukraine.

Putin’s belligerence swiftly caused anxieties in other prospective members of the Union. Russia's subsequent economic crisis served to further undermine the attractiveness of the EEU compared to other projects in the region, such as China's One Belt One Road initiative.

With the European Union to its West and China’s New Silk Road to its East, EEU member countries are gradually starting to voice their disillusionment of having joined the bloc. It appears that almost 25 years after the demise of the Soviet Union the Kremlin still has not learnt that countries simply do not like to be coerced into closed-member blocs and alliances.

If they won't join you, beat them

Attempts at regional integration in the post-Soviet space on the basis of equality and mutual respect for state sovereignty should be wholeheartedly embraced and encouraged. Sadly, the EEU does not profess this kind of integration.

When the Ukrainian population rebelled against Russian coercion to ditch the EU Association Agreement in favour of joining the EEU in late 2013, Putin was quick to react by annexing Crimea and invading the Donbas.

The message is clear: If invited for dinner in the Kremlin, it is not in your interest to decline.

Russia does not ‘invite’ countries into the EEU because it would like these countries to join, but rather it does so because it does not want these countries to make alternative choices. Sovereignty for me, but not for you is the motto of integration a la Russe.

Rouble pro quo

Sadly for Putin, what goes around comes around. Although the other prospective members of the EEU had no desire to end up in a Ukraine-like situation, they certainly put up a fight with Moscow, extracting hefty concessions in the process.

For example, Belarus managed to secure subsidies of up to $10 billion (€8.9 billion) per annum, consisting primarily of cheap oil and natural gas deliveries.

Armenia similarly only accepted to join the EEU and decline the EU Association Agreement after Putin promised it similarly low gas prices as offered to Belarus.

Furthermore, Russia has had to commit to numerous investment projects in Kyrgyzstan. Enticing countries to join a bloc they have no desire of joining comes at a price.

Russia's economic fallout

Rattled by sanctions and low energy prices, the effects of Russia's economic downturn are being felt throughout the region.

The damage to EEU members has been extensive, highlighting concerns in national capitals that Moscow is dragging the entire region down with it.

Due to the rouble’s devaluation, non-Russian goods have suffered a competitive setback, forcing other EEU members to devalue their own currencies.

The resultant economic disgruntlement among the region’s population added to ongoing frustrations about how Russia blocks many agricultural goods from entering its territory on the basis of obscure sanitary regulations, how Gazprom and Transneft do not open their gas and oil pipelines to competitors, and how Russia forced the other countries to raise their import tariffs to the higher Russian level.

A country such as Kyrgyzstan, which is heavily reliant on the resale of cheap Chinese merchandise, is particularly affected by this. More worryingly perhaps from the point of view of regional stability, the economic crisis in Russia is causing many migrant workers to lose their jobs, thus greatly decreasing migrant remittances; traditionally a major source of revenue for countries in Central Asia.

Looking East

Where Russia’s economic appeal in the region is going down, China’s, by contrast, is rising fast.

Already the region's largest investor since the late 2000s, China pledged to invest $46 billion (€41 billion) as part of its Silk Road initiative.

The construction of the new Silk Road is gradually eroding the attractiveness of Russia as an economic partner and EEU members are scrambling to claim a place along the route.

The Silk Road will gradually strengthen Beijing’s bargaining power vis-a-vis Moscow, which is already playing second fiddle in the bilateral relationship owing to its expulsion from international capital markets.

The completion of the Silk Road looks set to further undermine Moscow’s power in Central Asia. Illustrative of the EEU’s relative decline were the remarks by Kazakh president Nursultan Nazarbayev, who in an appeal to Eurasian leaders in February this year, outlined the argument for closer integration with both China’s Silk Road and the European Union.

Unless Russia’s leadership learns to understand that regional integration can only succeed on the basis of ties that bind, rather than creating binds that tie, the future of the EEU already looks doomed barely two years after it first saw the light.

The Crude World monthly column on Eurasian (energy) security and power politics in Europe’s eastern neighbourhood is written by Sijbren de Jong, a strategic analyst with The Hague Centre for Strategic Studies (HCSS), specialised in Eurasian (energy) security and the EU’s relations with Russia and the former Soviet Union.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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