Russia, Belarus, Kazakhstan make progress in economic integration

Russia, Belarus, Kazakhstan make progress in economic integration
The Russian, Belarussian and Kazakh presidents agreed Friday to establish the Eurasian Economic Union (EEU) aimed at bringing the former Soviet republics closer together.

Local analysts said the EEU, initiated by Russian Prime Minister Vladimir Putin, would boost sub-regional economic cooperation but warned the union also faced internal and external problems.

REASONS FOR BINDING

Putin first proposed the EEU as a vehicle for former Soviet republics, in an article published in October.

According to his initiative, the Russia-Belarus-Kazakhstan Customs Union should be gradually transformed into the EEU, which is expected to become a bridge between Europe and the Asia-Pacific region.

Among various sub-regional organizations in Eurasia, analysts were optimistic about the EEU's future, as the three countries also agreed to establish a Eurasian Economic Commission -- an executive body for the EEU seen as the first real supranational body in the region.

The commission, according to the three leaders, will start operation next year.

In recent years, the three countries have accelerated their integration due to various reasons.

The first factor was the global economic turmoil, which has severely hurt the Commonwealth of Independent States (CIS) members' already sluggish economic performances.

Russian President Dmitry Medvedev said many CIS members' economies were externally oriented, so their domestic economies were hard hit by shrinking outside markets.@ A common economic space would counter external risks by helping the countries to expend domestic demand, he said.

According to the presidents, the trade volume within the Customs Union framework had grown by nearly 40 percent in the first half of 2011.

For Belarus, Kazakhstan and other CIS states, the figure proves the effectiveness of the economic integration, they say.

The second reason lies in Russia's view of its world standing. Russia relies heavily on the CIS to maintain its status as a world power. Moreover, the CIS is also Russia's strategic security shield.

As its dream for joining the European Union (EU) faded, Russia pushed forward the integration of a pan-CIS, which also became stranded.

However, the country's cooperation with Belarus and Kazakhstan has yielded tangible fruits. That's why Russia has turned to its Customs Union in seeking its first partners for the EEU.

In his initiative, Putin said he hoped the EEU would become an influential pole in the multi-polar world.

Analysts said the development of the EEU would also lead to the integration of foreign affairs and military forces among EEU members.

In addition, the turbulence in Western Asia and North Africa reinforced the three countries' determination to forge integration.

The re-integration of the post-Soviet countries would create a "power center" of their own, Andrei Grozin, director of the Central Asia section of Moscow's CIS Institute, told Xinhua.

Analysts said the three-nation Customs Union passed through a similar process to the way in which the European Union had developed, only it had accomplished the same in a much shorter time.

The EEU would avoid problems the European Union had come across lately, Medvedev said.

LOOMING PROBLEMS

According to Medvedev, the EEU's priority task is to provide free flow of goods, capital and workers in a common economic space and in potentially coordinate currency and macro-economic policy.

The three countries, with an aggregate gross domestic product hitting 2 trillion U.S. dollars and a majority of the world's gas and oil reserves, would create a huge market after their integration.

However, analysts have already listed possible problems.

First, the power of the three countries is unbalanced, with Russia overwhelmingly stronger than the other two.

Once the three are integrated, capital, technology and talent are more likely to flow to Russia. Moreover, if an economic recession occurred in any of the three, Belarus and Kazakhstan would be far more affected and choose to protect their own economies first.

Second, outside powers are trying to expand their engagement in the region after the collapse of the Soviet Union and seeking opportunities to intervene into regional issues.

International powers, like the United States and European countries, would intensify their activities in the region once they recovered from the economic crisis, providing a new challenge to integration, analysts said.

"So far, there are no guarantees the EEU will survive itself, because the union depends much on political situations in its founding members," Grozin said.

Editor: Fang Yang

English.news.cn   2011-11-19 21:01:53 FeedbackPrintRSS
by Zheng Haoning, Zhou Liang, Igor Serebryany

MOSCOW, Nov. 19 (Xinhua)