Complicated choice of Eurasians

Complicated choice of Eurasians
22:32 23 Aprel 2015
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Baku, Azerbaijan, Apr. 23

By Elena Kosolapova – Trend:

Very little time has passed since the creation of the Eurasian Economic Union, which was initially positioned by its initiators as a competitor and economic counterweight to the EU.

However, in less than the four months that have passed since its creation, it has become obvious that the hopes anchored on it are collapsing like a house of cards.

From the beginning, things went wrong with ensuring the basic declared principle of the Eurasian Union - free movement of goods, capital, services and labor, although it seems that presidents of the member states of the Eurasian Union agreed on this issue in advance.

In practice, it turned out that all the freedoms were unprofitable for all. In particular, it became clear that the Kazak and Belarus business could not compete with Russian producers. This was especially evident during the sharp drop of the ruble. While the national currencies of Kazakhstan and Belarus remained relatively stable, the Kazakh and Belarus people rushed to go on shopping trips to Russia, leaving their domestic manufacturers out of business. With the shopping exodus, their countries began to seriously think about restoring customs restrictions on the border with Russia. Kazakhstan and Belarus also are worried that the free movement of labor will lead to a serious outflow of skilled workers to Russia, where wages are higher.

Russia, in turn, was not ready to provide free access to its transport system for hydrocarbons from Kazakhstan. It also became evident that in terms of the free movement of capital, Russian business will be registered in Kazakhstan and Belarus, where taxes are lower, which will lead to losses in the Russian budget.

But the most difficult test for the Eurasian Union was that it had to begin its work in terms of Western sanctions against Russia, which is the engine of this integration association, Russian retaliatory restrictions on the import of Western goods and weakening of the Russian economKazakhstan and Belarus found themselves unwittingly drawn into a confrontation between Russia and the West, trying on one hand to avoid its negative impact, and on the other hand to draw their own benefits from it.

And as a result, Russia’s trade with Kazakhstan and Belarus has turned into tracking of supplies of “illegal” goods on one hand, and the desire to carry out these supplies via various by-pass routes on the other hand. This affected the trade relations of Russia, Kazakhstan and Belarus not in the best way, and as a result, negatively affects the relations between the countries as a whole.

Evidenced is provided by the official statistics on trade; since the creation of the Eurasian Union the trade turnover has been firmly falling. And all this is taking place among the countries that have already undergone a certain preparation period for the creation of a common integration area as part of the Customs Union.

But let’s not forget that the Eurasian Union also includes Armenia, and Kyrgyzstan also plans to join it in May, and in the future Tajikistan will join the union as well.

These countries were totally unprepared for integration with Russia, Kazakhstan and Belarus, and due to the weakness of their economies, they will create additional problems for the Eurasian Union, as they will require financial investments, giving little in return.

Thus, the Eurasian Union is losing more and more supporters and gaining more and more opponents.

Was the Eurasian Union idea doomed to failure from the start? Of course not.

Integration in any form opens up certain possibilities and prospects, and may be beneficial and useful. However, the timing chosen to create it was off.

There only remains to be seen whether the union can be viable in the current situation, and whether it is worth preserving it, or not.

Edited by CN


Elena Kosolapova is Trend Agency’s staff journalist, follow her on Twitter: @E_Kosolapova

Follow us on Twitter @TRENDNewsAgency

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