Eurasian Integration: Adapting to New Realities

_ Zhao Huasheng, Professor, Institute of International Studies, Fudan University. Fudan, 16 July 2020.

Political thinking and economic logics are both serve as important driving forces for Eurasian integration, but sometimes they contradict each other, which restricts the Eurasian integration from going forward quickly. This is also one of the important reasons why it is difficult for the Eurasian integration to achieve a major breakthrough.

COVID-19 has had a formidable impact on international politics and the world economy, but the epidemic has not put Eurasian integration off the region’s agenda; instead, it has given it a new impetus. However, Eurasian integration still faces challenges as before, and its development and potential for breakthroughs mainly depend on whether it can resolve a series of “traditional” constraints.

Diversification or Fragmentation?

Eurasian integration has a common name but no common mechanism.

It is not a single regional project or mechanism for cooperation; more precisely, it is a process made up of many different strategies, regional organisations, cooperation mechanisms, and initiatives, such as the SCO, the Eurasian Economic Union, OBOR, the Greater Eurasian Partnership, the Central Asian integration process, the Turkic-speaking countries’ cooperation committee, and so on. They are all aspects of Eurasian integration, but no single one of them represents the entirety of Eurasian integration. This has resulted in Eurasian integration entailing a diverse array of concepts, structures and mechanisms.

The diversity of Eurasian integration is a natural reflection of the complex national, historical and cultural composition of the Eurasian region. All of the relevant countries aim to promote mutual cooperation, and by doing so contribute to regional integration in Eurasia to varying degrees.

The problem is, however, that under certain circumstances, if they are confining and isolating each other, it could also possibly lead to the institutional fragmentation of the sub-regions of the Eurasian region, which restricts regional cooperation as a whole or on a larger scale.

The SCO is the only region-wide organisation in the region. It includes eight full member states and four observer states, which are the major countries of the region, covering most of Eurasia, Central Asia, South Asia and West Asia.

It can be said that the SCO connects the major sub-regions of the Eurasian region and has the broadest representation. If Eurasian integration requires a common platform, the SCO is the most suitable one.

China has been most active in advocating regional integration using the framework of the SCO. As early as in 2003, China proposed establishing the SCO free trade zone and setting up the SCO development bank. But up to now, the SCO has not made a breakthrough in the formation of regional integration mechanisms. The creation of the SCO bank is still in flux.

The EEU has reached a higher level of regional integration and has been the most successful organisation in pursuing Eurasian integration. However, the membership of the EEU is so far limited to former Soviet republics, and requires its members to have specific political backgrounds, which limits its potential as a broad framework for Eurasian integration. The EEU has expanded its scope of cooperation mainly by establishing free trade zones with other economies. It has signed agreements with Vietnam, Iran, Serbia and Singapore, and is in talks with Egypt, Israel and India to establish free trade zones. However, it is very cautious about the establishment of a free trade zone with China, its largest trading partner.

The five Central Asian countries (Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan and Tadzhikistan) have made many integration attempts since immediately after gaining independence. They set up the Central Asian Union, Central Asian Economic Community and Central Asian Cooperation Organisation. Although many documents were adopted and specific targets were set, little was achieved.

In 2005, after the Central Asia Cooperation Organisation merged into the Eurasian Economic Community, the first phase of integration of the five Central Asian countries ceased.

Since taking office as Uzbekistan’s President in 2016, President Mirziyoyev has activated a new stage of Central Asian integration. In 2018 and 2019, the five heads of the Central Asian states held two consultative meetings on Central Asian integration. The Central Asian countries have very close geographical, historical, ethnic and religious ties and share many common problems and concerns, so integration has a natural need to fulfil. It is still difficult to determine how far Central Asian integration will go. However, while it is essential in the Central Asia region, it is limited to a sub-regional scope in the Eurasia region.

The integration of Central Asian countries itself is reasonable, but one fact should be recognised: that the United States intends to use the integration of these countries to drive a wedge between the group and both Russia and China. It could be observed in the greater Central Asia plan, a well-circulated idea of the United States after the Afghanistan war, the New Silk Road Strategy of the United States of 2011, and the current Indo-Pacific strategy. The United States has made it no secret that, by encouraging the integration of Central Asian countries, it is pursuing its own geopolitical purposes. Objectively, it could add geopolitical elements to Central Asian integration, which isn’t desired.

In 2015 the Turkic Speaking Countries Cooperation Committee proposed the concept of Turkic world integration and adopted a relative document in 2018. The Turkic Speaking Countries Cooperation Committee has five members, namely, Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan, with Hungary as an observer state. Turkmenistan is the only Turkic-speaking state that has not joined.

Turkic-speaking countries are all Eurasian countries; the majority are in Central Asia. Therefore, Turkic-speaking world integration can also be considered Eurasian integration. The ties cited as a basis for the integration of Turkic-speaking states are language and culture, which is both an advantage and a limitation. The group does not include Persian-speaking Tajikistan in Central Asia, or Georgia and Armenia in the Caucasus, so it’s impossible for the group to expand into a greater regional cooperation mechanism.

Both China and Russia have their own designs and strategies for regional integration in the Eurasian region. China and Russia are both big countries with key interests in Eurasia. As major countries, they have a greater sense of regional responsibility and are more accustomed to maintaining an overarching perspective when viewing the region.

In 2013, China put forward the One Belt One Road initiative. The OBOR initiative covers the SCO as well as greater Eurasian region. This initiative enables China to choose the directions and forms of regional integration independently and freely, alongside the platform of the SCO.

Russian President Putin first proposed the Greater Eurasian Partnership at the St. Petersburg Economic Forum in June 2016 and confirmed it in his State Address the same year. By putting forward the concept of the Greater Eurasian Partnership, Russia wants to come up with its own grand strategic regional concept, which Russia currently lacks. The concept of the Greater Eurasia Partnership enables Russia to step beyond the traditional Eurasian area, namely the former Soviet Union, and move towards a greater Eurasia, which would include Eastern Europe, the Asia-Pacific region and Indian Ocean region, with its own integration platform.

The diversity of integration mechanisms and forms in Eurasia is a unique phenomenon, which is caused by the complicated politics, histories, geography and culture of the Eurasia region. Diversified forms of integration are best suited to the reality of the Eurasian region. However, what needs to be avoided is fragmentation, that is, the lack of mutual coordination or even becoming a mutual limiting factor. Some of these mechanisms are closed or semi-closed, they are not open to all countries in the region, and, in the absence of coordinated development, could create certain shared restrictions affecting the development of bilateral economic relations between member states and no-member states. A large number of integration mechanisms could enhance economic relations in sub-regions, but it does not necessarily promote the more large-scale integration of the greater Eurasia region.

Political Thinking and Economic Logics

Political thinking and economic logic both serve as important driving forces for Eurasian integration, but sometimes they contradict each other, which restricts Eurasian integration from going forward more quickly. This is also one of the important reasons why it is difficult for Eurasian integration to achieve a major breakthrough.

This is particularly true in relations between China and Russia, the two most important countries pursuing Eurasian integration, without which so-called Eurasian integration is impossible.

Over the past 20 years, there have been various predictions and comments regarding conflicts between China and Russia in Central Asia, such as conflicts over resources in Central Asia, conflicts over competition for influence in Central Asia and so on. However, such conflicts have failed to occur. China and Russia have been pursuing cooperation in Central Asia and Eurasia since formation of the “Shanghai Five” in 1996, the year both countries declared a strategic partnership, and the two countries have maintained cooperative relations since then.

But, due to their different historical backgrounds and economic positions, China and Russia have different ways of thinking about Eurasian integration. Specifically, China attaches more importance to the economy and economic thinking, while Russia attaches more importance to politics and political thinking.

China sees Eurasian integration first of all as an economic project, motivated mainly by economic logic. China has been actively advocating a reduction of barriers to economic integration, lower the cost of economic cooperation, to achieve the most economically rational allocation of resources, to make full use of complementary economic structures, and to create favourable conditions for regional economic cooperation and integration.

While Russia values the economic importance of Eurasian integration, it sees it as a political project as well. Like any empire in history, Russia has been suffering from “empire syndrome” since the breakup of the Soviet Union. Russia regards the former Soviet Union as its sphere of influence, and is politically and psychologically sensitive to the entry of other powers into the region, especially when the influence of these great powers is likely to surpass that of Russia.

The same is true for China. Russia has experiencing an ambivalence in its attitudes towards China in Eurasian integration. On the one hand, Russia recognises the importance and necessity of cooperating with China, and it is willing to promote Eurasian integration jointly with China. On the other hand, it does not want to see China’s presence in the region become too deep. This has left Russia both on the accelerator and the brake in its cooperation with China in promoting Eurasian integration. From an economic point of view, Russia likes push ahead at full speed, but from a political point of view, Russia purposely limits the speed.

Russia, therefore, maintains a very cautious position towards deeper economic integration with China in Eurasia. It is one of the reasons why economic cooperation in the SCO region has lagged, and why the EEU has been able to establish free trade zones with other countries, but China is not included.

China’s disproportionately large economy is an important driver and resource for Eurasian integration, but it also puts pressure on other countries, including Russia. It is another major problem for China’s partners in Eurasian integration. It raises understandable concern in Russia that deep, unchecked integration with China could place Russia in an unfavourable economic position and give China an overwhelming role, allowing Chinese goods to dominate the markets of Russia. Thus, it’s in Russia’s interest to pursue a balance with China, to prevent the region from being dominated by one country.

This is one reason why Russia had actively advocated the membership of India in the SCO. Enlargement has increased the geopolitical weight of the SCO, but this increase in the number of its member states and geographical expansion has made the SCO’s regional economic integration even more difficult.

New Paths Are Needed

Regional integration is not an end in itself. Its purpose is to optimise regional resource allocation and promote regional economic and social development. The same is true of Eurasian integration.

Unlike Europe, the Eurasian countries differ greatly in their political cultures and religious beliefs, and their economic development gap is huge. Due to these unique conditions, it is extremely difficult to form an overall mechanism for Eurasian integration.

So, it is inevitable that integration in Eurasia will take many forms. But in all these forms, the one that affects Eurasian integration most is the connection between the Silk Road Economic Belt (SREB) with the Eurasian Economic Union (EEU). If Eurasian integration could make a breakthrough, it is the most likely breakthrough point.

China and Russia are the major countries in the SREB-EEU connection. Therefore, in some sense, it is the integration between China and Russia, and to a large extent the progress of the SREB-EEU connection will also represents the advancement of Eurasian integration. Its advantage is that, unlike the SCO, it does not have as many bodies. The SCO has eight bodies, and reaching agreement is not only difficult but also costly. The SREB and EEU project is between two parties, and the objects of negotiation are clear.

China and Russia issued a special joint statement, announcing the implementation of the strategy of linking the SREB with the EEU, which shows that China and Russia attach great importance to this. So far, China and the EEU have held six rounds of meetings and certain progress has been achieved, but no breakthrough has been made.

The alignment of the SREB and EEU is not only a question of economic cooperation, but it concerns a mutual strategic and political understanding between China and Russia as well. Without the deepening of this strategic mutual understanding between the two countries, a breakthrough in integration between China and Russia is unthinkable. Therefore, it requires the simultaneous development of political and economic cooperation.

A breakthrough in the connection of the SREB and EEU can only be achieved with a change of political thinking, through the balancing of economic benefits, and through the mitigation of the related concerns of each side. Only by removing or alleviating concerns about the negative consequences integration might have for the national economy, and by appreciating the economic benefits that integration can bring will they be willing to promote deep integration.

Building new industrial value chains can become an important way to promote Eurasian integration. The COVID-19 outbreak has been damaging global industrial value chains severely, revealing the vulnerability of overly long and overly complex industrial value chains. The deterioration of political relations between major countries such as China and the United States also poses a threat to global industrial value chains.

There is reason to believe that the global industrial value chains will undergo some restructuring after the pandemic. Countries will pay more attention to reducing their vulnerability, and the regional nature of the global industrial value chains will be strengthened. Promoters of Eurasian integration should take this opportunity to develop closer regional industrial value chains, which will bring stable economic and social benefits to Eurasian countries and serve as an important driving force for regional integration.

Eurasian integration should increase its paths so as to provide more sources of power to keep the process going forward. One possible area of cooperation is public health, the prevention of contagious diseases, and the elimination of the consequences of natural disasters, plant diseases and pest control. It’s not a quick fix, limited to the outbreak of COVID-19, but a long-term development need. The geographical proximity of the Eurasian countries makes it even more necessary to strengthen cooperation in these areas. These non-traditional security areas have obvious common interests, making mutual cooperation relatively easy. We’re used to thinking of these fields as resource-consuming, but in fact they have great industrial, scientific and technological value, and could create enormous economic benefits. It could also be a new approach to Eurasian integration.

Source: https://valdaiclub.com/

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