The Eurasian Economic Union Flexes its Muscles

_ Dmitry Bokarev. Moscow, May 12th 2017.

In recent years, the Eurasian Economic Union (EAEU), a multinational partnership uniting Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, has become a significant force on the international arena. However, in order to stabilize development in all directions, and to make the Union itself as strong and as long-term as possible, it needs to attract more members. The view is that economic blocs like the ЕАEU only become truly strong and prosperous if their influence covers no less than 300 million people. However, the cumulative population of the five current members of the EAEU is still about 183 million. Therefore, the association is currently making efforts to involve more countries into the cooperation. States that are not ready to become full members of the Union may get an observer status, or become partners in free trade zones (FTZ).

Currently, the Republic of Tajikistan (RT) is the most likely candidate to join the EAEU in the near future. This country is quite important both for the EAEU and for Russia. As is well-known, in the east, Tajikistan borders with China, and Chinese businesses are active there. In order to divide spheres of influence harmoniously between Russia and the PRC, and not to allow Tajikistan to slip entirely into the hands of China, Russian companies should also become more active and connect with Tajikistan through close economic ties.

In the south, Tajikistan borders with Afghanistan, and acts as a buffer separating the relatively calm part of Asia and Russia from the regions where terrorist threats are emanating from. It is no coincidence that the country has regular military exercises with the CSTO countries (of which Tajikistan is a member, along with all the members of the EAEU). The Russian military, and even military personnel from China, take part in the Tajik-Afghan border control. All the countries of the region are interested in peace and stability in the Republic of Tajikistan, and are ready to contribute to the development of its economy. This is another reason for Tajikistan to integrate its economy with its neighbours.

The possible accession to the EAEU is one of the most important decisions to be taken by Tajikistan in the near future. The country is closely tracking the successes of its regional neighbours, namely Russia, Kyrgyzstan and Kazakhstan, and all the difficulties that membership in the Union brings to them. In general, the Tajik leadership holds the view that integration with the EAEU will strengthen the economy and the international position of the State. However, Tajikistan is still hesitating. There are a number of fine points that make the country cautious, including the partial loss of revenues from customs duties in case of integration, as well as the necessity to reform the Tajik Customs Service in general. Besides, Tajikistan wants to be confident that having joined the EAEU, it would still be able to implement its plans to become a transit State between China and Afghanistan.

Perhaps, one of the most important difficulties is that, in order to join the Union, Tajikistan will finally have to resolve the border issue with Kyrgyzstan, which for many years has regularly led to conflicts along the Tajik-Kyrgyz border. In addition, the Tajik government is somewhat concerned about the future necessity, for some issues, of taking into account the opinion of the Eurasian Economic Commission (EEC), which is the main supranational regulatory body of the EAEU. Tajikistan needs guarantees that it will join the Union on the most favourable terms, and that it will get all the possible benefits while fully retaining its sovereignty.

The International Round Table – “Economics of New Opportunities. Perspectives of Cooperation of Tajikistan with the Countries of the Eurasian Integration Project”, took part in Dushanbe on April 4, 2017. Members of the Tajik government, representatives of business and science, as well as public officials, along with high-ranking guests from Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan, attended the event. Famously, up to half of Tajikistan’s GDP is accounted for by funds transferred to the country by citizens working abroad, mainly in Russia. It is not surprising that one of the first advantages of Tajikistan joining the EAEU to be discussed was the preferences received by citizens of the EAEU member-states willing to work in other EAEU countries. Labour migrants from Kyrgyzstan who are now officially-recognized workers in the Russian Federation, a status that has greatly expanded their rights and increased their income, were mentioned as an example. In its turn, the Tajik side represented by Farida Muminova, Head of the Centre for Strategic Studies under the President of Tajikistan, stated that for full integration, it is necessary to develop the infrastructure, probably hinting that the EAEU may take part in infrastructure projects of Tajikistan. In response, Kubat Rakhimov, Advisor to the Minister of Economy of Kyrgyzstan, spoke about the need to construct a Russia-Kazakhstan-Kyrgyzstan-Tajikistan railway route. Another important factor is the investments that the EAEU promises to Tajikistan in case of joining. According to Belarusian Ambassador Oleg Ivanov, this is a matter of economic survival for Tajikistan. In general, all representatives of Kyrgyzstan and Kazakhstan and other EAEU Member-States attending the event were unanimous on the fact that Tajikistan needs to join the Union, and that this would contribute to the prosperity of both the country and the entire region.

In addition to seeking new members, the EAEU continues to develop partnerships with other economic blocs and developed countries. In this light, the negotiations on the establishment of a FTZ between the EAEU and the Republic of Korea, held in Minsk on April 10, 2017, make interesting news. EEC members and other prominent representatives of the Union participated in the negotiations. The Korean side was represented by a delegation headed by Jung Mang Gi, First Deputy Minister of Trade, Industry and Energy. An increase in mutual investment, goods turnover and other areas of economic interaction, which should lead to the establishment of a FTZ in the future, were discussed. It should be reminded that such negotiations are in progress with India and Iran as well. Free trade with these countries will undoubtedly propel the EAEU to a new level. It is noteworthy that the interests of the EAEU extend far beyond Asia. For example, in April 2017, the Republic of Moldova was granted observer status in the Union.

The rapid growth rates of the EAEU demonstrate the effectiveness of this association, and it may be expected that in the future, it will become one of the key economic forces in the world.

Source: http://journal-neo.org

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