Will Uzbekistan Join the Eurasian Economic Union?

In October 2019, the chairwoman of the Russian Parliament’s Federation Council, Valentina Matviyenko, caused quite a stir in Uzbekistan. After a meeting with Uzbek President Shavkat Mirziyoyev, Matviyenko announced that Uzbekistan was working out the details of acceding to the Eurasian Economic Union (EAEU).

In Matviyenko’s words, “The president of Uzbekistan made a decision.”

A few days later, another Russian politician went further and said Uzbekistan would gain observer status in the Russian-led economic bloc in early 2020. Farid Mukhamedshin, a deputy chair of the Federation Council Committee on International Relations, said that step would coincide with the planned early 2020 visit by Mirziyoyev to Russia. (Dates for that trip have not been announced as of writing, but in late January during remarks to the new Uzbek parliament, Mirziyoyev said Tashkent would, indeed, take on observer status.)

A full two days after Matviyenko’s pronouncement, however, Senator Sodiq Safoyev – chair of the Uzbek Parliament’s upper chamber – delivered a correction: Tashkent had not reached a final decision on EAEU membership. In the weeks and months that followed, Tashkent turned its attention to putting on a democratic show with its December 22 parliamentary elections. But Uzbekistan’s attitude toward the EAEU was never far the headlines.

The question of Uzbek membership in the EAEU is on the surface an economic one, given that the EAEU is an economic bloc. But scratch that surface just a little and the geopolitical reality underneath becomes apparent: The EAEU is, if not by definition then certainly by effect, a Russian political project. It’s a geopolitical signaling device.

In a surprisingly candid statement made to Uzbek media outlet Kun.uz in October, Alisher Qodirov, the head of Milly Tiklanish – one of Uzbekistan’s five pro-government political parties – said that the EAEU had a “hidden political purpose behind it.” Although he commented in the same interview that the EAEU “can hardly be called the second USSR,” he ended it by noting that his party was against joining an alliance with economic goals.

Qodirov later told The Diplomat in passing that his comments were “mischaracterized” by the media.

In a December debate between the heads of the five parties contesting parliamentary polls, when asked their positions on Eurasian integration – a sideways method of asking about the EAEU without asking about the EAEU – all five broadly said they were pro-integration. Each stressed the need to carefully assess various courses of action, but none appeared to rule out the EAEU.

At present, the EAEU has five full members. At its launch, on January 1, 2015, Belarus, Kazakhstan, and Russia were the founding members. Armenia’s accession treaty came into force the next day and Kyrgyzstan’s in August 2015.

Eurasianet’s Sam Bhutia put out a succinct analysis last month looking at how the EAEU’s existing members have fared in terms of the organization’s core promised benefits: the free movement of labor, goods, capital, and services. While there may be benefits when it comes to labor movement – considering the vast population of Uzbeks who work in Russia – member states have seen few benefits when it comes to increased capital flows. As Bhutia noted, Uzbekistan has already attracted a large amount of Russian investment without EAEU membership.

“As a member, Uzbekistan would lose control over trade policy, transferring the right to negotiate trade agreements to the bloc as a whole,” Bhutia wrote in his conclusion, noting that the choice before Tashkent increasingly looks to be one between “regional integration and trade liberalization.”

While it’s impossible to know what regional growth rates, to take one measure of economic health, would have been like absent EAEU membership, the logged rates in recent years don’t make a strong case for membership leading to necessarily healthier economies. In fact, closer ties to the Russian economy double down on existing risks.

For example, Kyrgyzstan's annual growth rate, per the World Bank, spiked in 2013 at 10.9 percent, then tumbled to 4 percent the following year. In 2015, when Bishkek joined the EAEU, its growth rate was notched at 3.9 percent. In the years since it has risen slightly to 4.7 in 2017, but was back to 3.5 in 2018. Kazakhstan’s trajectory offers a similar story: In 2014, the growth rate was logged at 4.2 percent. In 2015 it fell to 1.2 and recovered by 2017 to 4.1, which lasted into 2018.

Looking at merchandise exports, Kazakh exports hit a high in 2012 at $86.4 billion and then slowly began to slip in 2013 and 2014, followed by a cratering in 2015 (down to $45.9 billion) and a bottoming out in 2016 at $36.7 billion. Though there has been a recovery, to just over $60 billion in 2018, Kazakhstan isn’t yet back to where it was in 2012. (Kyrgyzstan’s data shows a similar, though not as deep, dive and recovery.)

The underlying matter behind these trends is not the EAEU, but the 2014-2015 Russian financial crisis, touched off by a fall in the price of oil and sanctions imposed by the West on Moscow for its annexation of Ukraine’s Crimea. Moscow’s economic problems reverberated throughout the Eurasian space. Given that the region’s states are not yet even back to their pre-crisis growth rates or export rates, it’s arguable that the EAEU’s impact has been negligible in these areas.

Many Uzbek analysts are skeptical about the economic benefits of membership, and wary of the political implications. In a recent interview with The Diplomat, Farkhod Tolipov, the founder of an Uzbek nongovernmental research institution called Caravan of Knowledge, pointed out that arguments made in favor of the EAEU are formulated around the benefit to bilateral relations with Russia. “All who discuss EAEU as such and Uzbekistan’s joining it mostly focus on Russia and advance arguments linking them to bilateral relations with Russia,” he said. “So the EAEU obviously is rather a Russia-centric structure than a genuine multilateral one.”

Tolipov noted in a recent article that “cooperation between Uzbekistan and Russia do[es] not urgently require the [EAEU] platform” given robust and deep existing interactions.

It remains unclear what benefits Tashkent would yield from membership, which as Bhutia noted would entail ceeding a degree of control over trade policy to the EAEU. Nevertheless, in 2020 Uzbekistan will apparently become an observer in the EAEU. It’s a half-step toward membership on one hand, and on the other it’s a stalling move. All else aside, Russia’s gravity is tugging Tashkent toward the EAEU.