Toward an Incomplete Union

October was a big month for the Eurasian Economic Union (EEU). The parliaments of Russia, Belarus and Kazakhstan ratified the union’s founding treaty and their leaders also signed an agreement on Armenia’s accession after months of negotiations. Armenia plans to ratify the treaty in time for the union’s January 1, 2015 birthdate.

Three years ago, in October 2011, Russian President Vladimir Putin suggested “creating a powerful supranational union capable of becoming a pole in the modern world serving as an efficient bridge between Europe and the dynamic Asia-Pacific region.” A few months from debut and it is unclear whether either of these goals can be met in time for the creation of the EEU.

The EEU has been a work long in progress, originating in a 1994 speech by Kazakh President Nursultan Nazarbayev at Moscow State University in which he suggested that a regional trading block be built among the states of the former Soviet Union. Although Nazarbayev may be credited with the initial idea – a fact noted in a March 2014 book written by Eurasian Economic Community (EurAsEC) Secretary General Tair Mansurov bearing the cumbersomely translated title of “Eurasian project of Nursultan Nazarbayev which has been brought to life. To the 20th anniversary of the Eurasian project 1994-2014” – Russia has become the center of what was Nazarbayev’s dream.

Since the dissolution of the Soviet Union in 1991 there have been several successive attempts at reintegrating the remnant states in one fashion or another. The Commonwealth of Independent States (CIS), a loose association encompassing the former Soviet Union, toyed early on with establishing a free trade agreement among the members, but the agreements were never signed. The first concrete steps toward economic integration took place in 1995 when an initial customs union formed between Russia and Belarus. Over the following years, Kazakhstan, Kyrgyzstan and Tajikistan joined. By 2000, the union morphed into the Eurasian Economic Community (EurAsEC, which will be terminated on January 1, 2015 when the EEU is formed) and in 2010 the Eurasian Customs Union was formed by Russia, Belarus and Kazakhstan. The Customs Union adopted a single market in 2012.

Of the states still outside the EEU, only Kyrgyzstan is tangibly on the path toward membership. In October, its government boasted the unanimous approval of a roadmap toward membership, but domestic hurdles may delay the process significantly. Russia has tightened its grip on Kyrgyzstan, most notably in the energy arena, and a bad winter could shake public support for the EEU. In April, Russia’s Gazprom took over Kyrgyzgaz, the country’s natural-gas corporation. Part of the deal included forgiven debt, improvements to the country’s gas network, lowered gas prices for Kyrgyz consumers, and the belief that Kyrgyzstan, which only meets 2 percent of its gas demand with domestic output, would have a stable supply. Four days after the deal, however, Uzbekistan’s UzTransGaz cut off gas to southern Kyrgyzstan, citing a contractual stipulation tied to the ownership of Kyrgyzgaz.

Next likely to join the EEU, after Kyrgyzstan, would be Tajikistan. The country is often noted as desiring membership but has remained a quiet footnote in most discussions. At this point, Kyrgyzstan and Tajikistan are the only full EurAsEC members still outside the EEU. The two are economically negligible to the union. Tajikistan’s GDP is $8.5 billion and Kyrgyzstan’s is $7.2 billion, a tiny fraction of the combined GDP of Russia, Belarus and Kazakhstan of more than $2 trillion. For comparison, the EU’s combined GDP exceeds $17 trillion.

However insignificant they may be economically, Kyrgyzstan and Tajikistan are politically critical to the EEU’s success: Outside these two, there are no more easy candidates for membership.

Turkmenistan, fastidiously neutral, has expressed no plans to join and Uzbekistan, Central Asia’s most populous state, has decided to remain outside as well. Uzbekistan joined the EurAsEC in 2005, not coincidentally at the same time its relations with Europe and the United States soured over the Andijan massacre. It then suspended its membership in 2008 when relations with the West began to improve. The insular country, managed with a strong hand by President Islam Karimov, has no interested in inviting in undue Russian influence, and certainly not for free.

The European edge of the EEU was settled earlier this year when Georgia, Moldova and Ukraine signed association agreements with the EU. Breakaway regions in these states – South Ossetia and Abkhazia, Transnistria, and eastern Ukraine – have expressed desires to join but there is disagreement between Russia, Belarus and Kazakhstan about allowing unrecognized statelets into the union, with only Russia in favor. Armenia’s frozen conflict with neighboring Azerbaijan, Nagorno-Karabakh, was a sticking point in its accession negotiations. Belarus and Kazakhstan argued that only states within UN-recognized borders should be allowed in. It is still unclear whether these issues have been resolved as earlier documents implied that a customs post would be set up between Armenia and Nagorno-Karabakh.

Only two months remain in the EEU’s gestation. The union will most certainly be born incomplete. Kyrgyzstan and Tajikistan may join, but the European edge of the union is out of reach. Turkmenistan remains neutral, and Uzbekistan knows it doesn’t serve to open the door to Russia for nothing. It is unlikely that such a limited union can truly be a “pole in the modern world” and with Russian-EU relations frozen over the mess in Ukraine the EEU’s potential to serve as a bridge between Europe and the Asia-Pacific is virtually nonexistent.