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Sanctions against Russia may turn EEU into formal organization: interview with Alexander Libman

“Western sanctions against Russia, which is the major sponsor of the ‘Eurasian Union’ project, will certainly hinder the process of the EEU establishment, but are not likely to lead it to formal disintegration. It may also happen that the sanctions turn the Union into a purely formal ineffective organization,” Dr.Alexander Libman, Associate at the Research Division of Eastern Europe and Eurasia, German Institute for International and Security Affairs SWP, says in an interview with EADaily.

Mr. Libman, we are witnessing the establishment of the Eurasian Economic Union (EEU). Armenia has joined the Union recently. Kyrgyzstan is expected to enter it shortly. Will Russia – the actual sponsor and driving force of the project - manage to see it through despite the sanctions and the economic problems they have triggered?

The sanctions will certainly hinder establishment of the EEU, first of all, by reducing the interest of the other post-Soviet states in it in view of Russia’s weakening economy. The protectionist sentiments inside Russia (import restrictions, first of all) also affect the activity of the EEU. I do not think that the sanctions will trigger formal disintegration of the EEU, but they create more chances for the Union to turn into a purely rhetorical and ineffective organization resembling the ones of the post- Soviet Eurasia.

Establishment of the EEU has coincided with the implementation of the EU’s Eastern Partnership (EaP) Project, a part of the European Neighborhood policy. Some think Moscow stepped up the Eurasian integration efforts in response to the EU’s EaP. What do you think about it and what is the Eurasian Economic Union at large?

I would not say that the establishment of the EaP had no impact on the Russian leadership’s aspiration to support the EEU, but it would be wrong to say that the project was nothing but “a geopolitical response.” First of all, efforts to create integration projects in Eurasia have been made for over two decades already. Although those efforts were not so effective, the economic ties at the micro-level – through investments and migration – were developing quite actively in Eurasia. So, there is certain demand for integration projects in view of economic reasons (though, not for all the countries of Eurasia). In addition, the establishment of the EEU intensified in the period of the global economic crisis of 2008-2009. On the one hand, the crisis unveiled the value of the economic ties in the post-Soviet area for the Eurasian countries. On the other hand, it was taking place in the period when the key countries of the EEU – Russia and Kazakhstan – had enough reserves to avoid one-sided protectionist measures (as it happened in 1998, for instance). This combination could trigger the establishment of the EEU.

What do you think about the Eurasian Economic Union? Is it a political or economic union? Can it grow into a geopolitical union with evident political activity?

As far as I can see, the EEU is looking for its place in the world. Formally, it is an economic union. Furthermore, Kazakhstan rejects any elements of a political union. In the field of economy, the EEU is an established customs union with supranational bodies (which is a major achievement), but with quite evident non-tariff barriers. The treaty of 2014 on the establishment of the EEU pursued liberalization of the services and energy markets – the ambitions that have not been fulfilled yet and it is not clear whether these ambitions will be ever come true. However, the regulative content of the EEU and its mission are still differently interpreted by its members and even by certain politicians involved in the establishment of the Union. Some would like to see the EEU as an alternative to the West – and their influence in Russia is growing, unfortunately. However, there are also others wanting to see the EEU as an element of wider integration and close cooperation with the EU and East Asia.

It is unlikely that the EEU will turn into a geopolitical union. Neither Kazakhstan’s leadership (as I have said, it rejects any elements of the political union and pursues multi-vector policy) nor the Belarus leadership (that is now trying to use the discrepancies of the EU and Russia in its favor and values the political autonomy) is interested in it. Even if Russia attempts to turn the EEU into a political union (I am not sure that this goal is attractive enough to achieve a broad consensus among the Russian political elites), it will hardly manage to do it.

Some, especially western media and analysts consider the EEU as an attempt to re-establish the USSR of a new type. As for the accession of Armenia and Kyrgyzstan to the Union, they called it a fatal foreign policy mistake. Do you agree with such statements?

It appears to me that the situation is even more complicated. It certainly differs for Kyrgyzstan and Armenia. The economy of Kyrgyzstan is based on two elements: labor migration (to the EEU countries, mainly Russia and Kazakhstan) and trade in consumer goods with China, as Kyrgyzstan is a kind of bridge for China to bring its products to Central Asia. From the viewpoint of migration, the EEU membership is justified, as the Union implies liberalization of the workforce flow. As for the trade with China, the situation is more complicated, as Kyrgyzstan has faced a dilemma: the EEU membership requires tougher control over the border with China, while the refusal from the membership implies tougher control over the border with Kazakhstan. Anyway, Kyrgyzstan will no longer be a bridge for China. What it can do now is to choose the option with minimum losses.

The situation for Armenia is more complicated, as the country had a real opportunity to develop ties with the EU within the Eastern Partnership. But given the geopolitical conditions, I am not sure if the cooperation with the EU (to the extent the EU was ready to cooperate with Armenia) would really be able to become the engine of growth for Armenia.

The EEU is linked to some negative developments, such as consolidation of the authoritarian regimes in Eurasia. Of course, external factors (including Russia’s influence) have played a part in this process, though it is hard to say what particular part (comparing to the internal evolution of the post-Soviet countries). However, I think that this external influence has nothing to do with the EEU format, which is still a purely economic union. The influence would exist even without the EEU.

The Eurasian Union is not a monolith; it is a union of countries with different and sometimes even contradictory economic and political interests. For Russia, it is geopolitics, for Armenia – security, while for Kazakhstan and Belarus it is economy. Will these countries with different interests manage to create a viable union, considering the problems and challenges the world faces today?

As I have already said, the EEU is an operating customs union despite all discrepancies of its member-countries. Its prospects seem doubtful, but the customs union is already a solid achievement. Few unions in the world achieve such level.

Some EEU member-countries (Armenia, Belarus) are also members of the EU Eastern Partnership project. How will the Eurasian integration of these countries affect their relations with the EU, considering the deterioration of the Russia-EU relations over Ukraine?

Intensive cooperation with the EU is hardly possible for Belarus, as European countries reject Alexander Lukashenko’s policy. Therefore, I do not think the Eurasian integration will seriously change the state of affairs for that country. Meanwhile, Armenia was reluctant to choose between the EaP and EEU, and it chose the latter. In the current political situation, this will certainly complicate the cooperation with the EU, which is rather sad.

The world is changing rather dynamically, amid political turbulence and uncertainty. Some unions fail to respond to developments operatively and effectively. The European Union is also often blamed for sluggishness and red tape. How much do the operating and still developing unions meet the challenges and threats of the present-day world? Isn’t it the time to look for new approaches?

I do agree with you. Traditional “institutional” unions like the EU are not always seen as the optimal format of cooperation. In Asia, they often speak about “open” regionalism – flexible integration with open membership and organizations that are focused on specific functions or projects rather than on a broad spectrum of issues. Open regionalism helps to avoid protectionism of customs unions, both the EU (Fortress Europe) and the EEU are bright examples of that. Maybe, such option would be optimal also for the post-Soviet area, though the EEU with its strong supranational bodies has its advantages.

Interviewed by Arshaluys Mghdesyan

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