Is the great and powerful union back?
28.07.2011 14:20

Dr Alexander Volkov

At an international forum in Moscow devoted to the influence of the Customs Union of Russia, Belarus and Kazakhstan on business development in the common economic space, these countries’ prime ministers said they were positive about its promising future. The question is, whether there are hopes here for the revival of a new big and close union of states?

Almost 20 years ago, the Gorbachev Foundation, which had just been founded, arranged for an “analysis of the political situation in the CIS and possible scenarios of its future,” which involved many well-known political scientists, economists and sociologists. I was asked to sum up expert assessments. It would be interesting to go back to those documents to see which of the forecasts have come true and which haven’t and, more importantly, if the past could give a key to understanding the present situation.

From today’s point of view, the analysis seems sober and fairly brave. “The Commonwealth emerged in the forefront of centrifugal tendencies, in the process of the breakup of the unitary state burdened with historic tensions.” No one expected it to have a happy future. At the moment, the document read, “neither independent states nor the Commonwealth have established themselves… Overall, the chances of preserving the CIS are small. At best, it will play the part of a “liquidating committee” that is supposed to ensure a civilized divorce.”

Experts emphasized the opposite influence of two types of factors. The so-called factors of “objective nationhood” were supposed to promote integration. These included “the country’s geopolitical situation,” “objective preconditions for a common economic space,” “blending of people, many of whom were taken away from their native areas.” These factors are still in place, even if their influence is significantly smaller than it used to be.

It would seem that the long-term influence of these factors and the interests of states that emerged on the territory of the former Soviet Union should push a majority of these states towards mutual cooperation in some or other form. A typical example is Georgia, whose economy has suffered greatly because of the breakup with Russia and which cannot do without Russian energy. Russia, in its turn, is interested in economic cooperation and in having a good neighbor in the Caucasus. In this respect, the example of the Baltic states and, notably, Latvia, is also interesting. They had dreamed of independence vigorously, but remained in this blissful state for a surprisingly short time. It turned out that they were unable to exist independently and so they threw themselves in the arms of European organizations, obligations to which, in the economic sphere, for example, have proved tougher than the previous ones. So why isn’t cooperation in the former Soviet Union developing as is dictated by objective conditions and interests?

According to the analysis, all of the above named objective factors, all “rational reasons in favor of integration are weak or invalid… The decisive role belongs to subjective factors – political activities and the will of public forces, first of all, people in power.” It was pointed out that “a belief has formed in the mass conscience that it would be easier for nations to get out of the crisis on their own. That they should first get rid of the stalling influence of the supranational center and then swim towards some new shore, either westwards or eastwards”. The well known Thomas theorem (after W.I.Thomas, a renowned American sociologist) goes as follows: “If men define situations as real, they are real in their consequences.” This is exactly what happened.

Moreover, the analytical document of the 1990s emphasized that nationhood has weakened drastically in the former Soviet republics. There followed a crucial conclusion: “The aspiration of many big ethnic groups to achieve independence may combine with the remaking of the geopolitical map.”

The document that is almost twenty years old does indeed help to understand what is going on now. Present conflicts in the former Soviet Union are deeply routed in the past, especially in the period when the country broke up. It should be said that, fortunately, the worse-case scenarios did not come true: they admitted a possibility of hostilities and even a war between the new republics. But neither did the best-case scenarios, under which the CIS was supposed to become the core of a new state formation. However, few people believed in this possibility even at the time.

Instead, life suggested other forms of cooperation in the former common space. I believe it is difficult to overestimate the recent big steps to set up a customs union, which currently unites only three countries, Russia, Belarus and Kazakhstan. No, this is not about reviving the Soviet Union, of course – neither in the scale or the structure, essence or nature of international and inter-state relations. But views expressed at the conference “From the Customs Union to the Common Economic Space: Business Interests” were quite remarkable. Prime Minister Vladimir Putin emphasized that the setup of the customs union and the common customs territory, completed on July 1, was a remarkable event. “We have removed customs posts on borders between our three countries,” he said. “This is not just a simple, formal abolition of administrative procedures. Actually, for the first time since the Soviet Union’s breakup, we have made a real step towards restoring natural economic and trade contacts in post-Soviet republics.”

The common economic space is expected to start functioning already on January 1, 2012. Alongside free movement of goods, it also implies free movement of capital, services and workforce. Any company registered in any member of the common economic space will have the same privileges as domestic producers, i.e. will be able to take advantage of a national regime. Russia, Kazakhstan and Belarus are already reaping the benefits of the Customs Union. Their mutual trade turnover surged by over 43% in the first four months of the year. “The figure is telling and very impressive,’ Putin said, addressing representatives of the three countries’ business communities. “The removal of barriers that prevented mutual trade has created a big growing common market with over 165 million potential buyers.”

Also on January 1, 2012, the Eurasec Court will start functioning fully. It will accept applications from both countries and economic agents. “We thought about ways to give it a truly supranational strong status,” the prime minister said. “It will be true for both procedures, regulations, and the level of judges’ wages.”

The Union will gradually increase the role of supranational structures that will be delegated significant powers. However, it was emphasized, it is necessary to avoid what happened to the European Union to some extent, when national bureaucracy was replaced with supranational one or, worse, when supranational bodies created additional pressure.

Removing barriers within the Customs Union, Moscow, Minsk and Astana are not going to erect them at the Union’s external border. “On the contrary, the main goal is to combine our countries’ efforts so that all of us will be able to integrate in the global economy more efficiently and harmoniously, integrate into it and not fence ourselves off from it,” Putin emphasized.

Talks on the issue are already under way with the European Free Trade Association. In future, there are plans to start consultations on setting up a free trade zone with the EU countries. As Vladimir Putin put it, “it is not a simple task, but together, within the common economic space, we can fulfill it much more efficiently, with more benefits for Russia, Belarus and Kazakhstan that we would on our own.”

The agenda of the APEC summit that will take place in Vladivostok next year will include topics of trade liberalization and removal of barriers preventing economic cooperation. These efforts of Russia will be in the interests of all of its partners in the Customs Union, promoting common interests that have been agreed upon. The implementation of the planned measures is actually expected to change the configuration of entire Eurasia. Kazakh President Nursultan Nazarbayev has said that following the already established alliance and the common economic space, the parties should set up an analog of the EU, a Eurasian economic union. “In other words, we are working for the Customs Union and then for the common economic space to fit global economic processes and play an active part in the shaping of the regional and international agenda.”

Of course, there is no way that the enormous Soviet Union will be revived. It would require at least public realization of each country’s own economic interests as part of such a state’s interests, but, more importantly, a united political will, clearly expressed. We don’t have it now. But we equally cannot ignore the trends towards more beneficial and closer cooperation between states and people who live on the territory that used to be one country.