Aijan Sharshenova, PhD, Riga Stradins University and Crossroads Central Asia
This year, the Kyrgyz Republic celebrates the 20th anniversary of joining the Eurasian Economic Union (EAEU). Founded in 2014, the EAEU sought to foster economic development, free movement of goods, services, capital and labour, and contribute to modernisation of the member-states’ economies. The founding member-states, Russia, Belarus and Kazakhstan might have been inspired by then-popular ideas of Eurasianism. The original Eurasianism was based on a socio-philosophical concept according to which Russia is neither a European, nor Asian civilisation, and, as such, it must follow its own path. Contemporary Eurasianism is multifaceted and increasingly political. In more practical terms, the EAEU borrows organisational practicalities from other integration projects, such as the European Union.
In this op-ed, I discuss pros and cons of being part of the EAEU from the point of view of a smaller member-states. The Union currently consists of five member-states: The original three plus Armenia and Kyrgyzstan, two smaller nations, which joined the Union slightly later.
Benefits
Ten years into the EAEU’s existence, there is still no consensus among experts and observers about whether membership is beneficial. Opinions vary widely, and it often feels as experts interpret the same data in completely different ways. For this reason, it makes sense to outline both the perceived benefits and potential concerns, as well as existing critiques of the EAEU, and leave it to the reader to determine which sound more convincing.
The benefits of membership in the EAEU vary among its member states and depend on the size and nature of their respective economy. The Treaty on the Eurasian Economic Union highlights free movement of goods, services, capital and labour as one of its key objectives. Goods, services and capital mostly come from the more economically stronger nations, such as Kazakhstan, while labour movement brings short-term benefits to smaller nations, such as Armenia and Kyrgyzstan.
Russia, being the largest economy within the EAEU, benefits significantly as the Union’s leader. It gains from greater economic cooperation and trade with its neighbours, which helps stabilise its economy, especially in light of Western sanctions imposed on Russia for its war in Ukraine. Russia uses the EAEU as a tool to influence post-Soviet nations and strengthen its geopolitical position in the region, countering the influence of the European Union and other Western countries in its immediate vicinity. The EAEU makes labour movement simpler, which benefits Russian companies in need of labour, particularly as many Russian workers are either in Ukraine or abroad to avoid military conscription.
Kazakhstan benefits from access to a wider market, that helps to diversify its economy away from its heavy reliance on fossil fuel. The EAEU also aids in improving transportation connectivity and infrastructure, a key advantage for Kazakhstan as a landlocked country. While Kazakhstan is a major participant in the EAEU, it also maintains relations with China and the West, using the Union to balance its geopolitical interests.
Belarus, which depends heavily on Russian energy subsidies and trade, benefits from easier access to the Russian market. Despite occasional disagreements with Russia over economic policies, Belarus continues to gain economically from membership in the EAEU and its collaborative framework.
Armenia has also seen benefits, such as increased customs revenue, access to a larger market for its products, and enhanced labour mobility to Russia.
Finally, for Kyrgyzstan key benefits lies in eased labour migration regulations, which allows its citizens to work in Russia, sending back substantial remittances that are crucial for its economy. Like other members, Kyrgyzstan benefits from being part of a larger economic bloc, potentially aiding in economic development through trade.
Critiques and Concerns
Despite the creation of a common market for goods, services, capital and labour (Article 4, the EAEU Treaty) being one of the ultimate goals of the EAEU’s establishment, the market already existed in some form due to the shared history of the Soviet Union. Increased trade and connectivity are natural outcomes in a region with such a past. Thus, when any increase of economic activity is attributed to the EAEU membership, one must consider whether things would be much different without it.
In addition to this, there are three substantial criticisms with regards to the EAEU: disproportionate relations within the Union, economic challenges, and geopolitical dynamics. Critics argue that the benefits are disproportionately in favour of Russia, with smaller states potentially facing economic and political dependency.
The actual economic benefits can be debated due to various internal issues within member states like corruption, economic disparity, and the lack of a truly unified market due to differing national policies. Numerous perceived benefits revolve around trade and customs, and both areas are notoriously riddled with informality and lack of accountability in the region.
Finally, the EAEU is seen by some as more of a political project for Russia rather than a purely economic one, which might not always align with the economic interests of all members. The critics outside the region see the Union as an attempt to re-Sovietise the region. More recent concerns are potential repercussions of close formal association with Russia under sanctions.
In addition, being a part of an exclusive economic integration project almost certainly implies certain limitations on trading with other regions. This concern has been partially addressed by a trade and economic agreement with China, a key regional economic partner.
In summary, while Kyrgyzstan gains from increased trade, market access, and especially labour mobility, Russia appears to reap the most benefits in terms of both economic and political leverage.
The commentary was published at Italian Institute for International Political Studies https://www.ispionline.it/en/publication/the-eurasian-economic-union-pros-and-cons-for-smaller-member-states-199114.