Analysis | Russia’s Transition from the Soviet Union (SU) to the Eurasian Economic Union (EAEU)

| Noyingbeni Odyuo & Dr. Karamala Areesh Kumar
  • Under the leadership of Vladimir Putin, Russia re-emerged as an economic and military power in the Eurasian region by forming strategic alliances.
  • Russia formed the Eurasian Economic Union (EAEU) by merging the Custom Union and CES
  • The goal of the EAEU is to achieve free movement of people, goods, capital and people similar to that of the European Union and emerge as an alternative economic force to former Soviet republics.
  • The declining power of NATO and the rising power of organizations such as the SCO and EAEU will further help Russia achieve its interests in the Eurasian region.

Introduction

The disintegration of the Soviet Union in 1991 led to significant shifts in the international power structure. The downfall of communism, domination of the US and capitalism forced Russia to face international isolation in the post-cold war period. Several post-Soviet states, including Latvia, Lithuania and Estonia, developed Western identity by integrating into European Union (EU) and the North Atlantic Treaty Organization (NATO). In contrast, Russia developed a unique Eurasian identity by not aligning with West dominated military and economic alliances. 

The new Russia emerged as the successor of the USSR and once again tried to assert its dominance in the Eurasian region and restore its influence in global politics. In this regard, a closer look into the emergence of the Eurasian Economic Union (EAEU), the Shanghai Cooperation Organization (SCO) and the Collective Security Treaty Organization (CSTO) as an alternative forum for former Soviet states can be seen as Russia’s attempt to counter EU and NATO in terms of economic and security cooperation. 

Emergence of EAEU

Under the leadership of Vladimir Putin, Russia re-emerged as an economic and military power in the Eurasian region by forming strategic alliances. In President Putin’s words, “A new integration project for the Eurasian region, which will be the future in the making”, will include all the post-Soviet states that resemble the European Union. Simultaneously, Russia adopted the Neighbourhood policy to deepen the economic and political relationship with former Soviet countries.1

In January 2010, a Customs Union (CU) was established between Belarus, Kazakhstan and Russia. In January 2012, “the Common Economic Space (CES)” was formed where all the member states will enjoy minimal trade barriers, reduction of border controls, joint regulations, minimal energy tariffs etc. The main agenda of Russia behind the regional integration process is to revive the Soviet glory. Russia formed the Eurasian Economic Union (EAEU) by merging the Custom Union and CES; it also established the Eurasian Economic Commission, which resembled the European Commission. Similarly, in 2012, the Eurasian Economic Court was also founded. The gradual rise of the Eurasian Economic Union attracted the attention of various Western powers, including the United States.

In President Putin's words, “A new integration project for the Eurasian region, which will be the future in the making", will include all the post-Soviet states that resemble the European Union. 

Other than this, Russia was involved in various other regional integration projects aimed at economic policies and development in the region. One such initiative is the CIS (Commonwealth of Independent States) which aims at economic coordination and foreign policy in the Eurasian region. The Eurasian Economic Community is also an active organization spearheaded by the Russian Federation and Kazakhstan in the year 2000 for further economic integration in the region. The Eurasian Economic Community was a creation of President Putin. The membership of the community was expanded to include nations such as Belarus, Kyrgyzstan, Tajikistan and countries such as Armenia, Ukraine and Moldova were observers. The community also has a council headed by the representative heads of the member countries. The main aim is to manage and coordinate various economic development projects, security within the borders, and a standardized form of currency exchange.3

The Collective Security Treaty Organization (CSTO) was established in 1992 to integrate military linkages in the region between the post-Soviet republics, including Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. The formation of the CSTO also strengthened Russia’s defence alliance in the Eurasian region. 

Why is the EAEU Important for Russia?

One of the best examples of a more integrated effort by Russia in the Eurasian region can be seen in its attempt to form the Eurasian Economic Union (EAEU), established in 2015, which brought the post-Soviet states together. The members of the EAEU consist of Belarus, Russia, Armenia, Kazakhstan and Kyrgyzstan. Its goal is to achieve free movement of people, goods, capital and people similar to that of the European Union. The trade relations with emerging economies like India and China, the EAEU emerged as an alternative economic force to former Soviet republics. As the largest economy in the region, Russia also showed greater interest in China’s Belt and One Road Initiatives (BRI). 

The dominant position makes Russia the most influential member of the EAEU. As the successor of the Soviet Union, the new Russia expressed its unwillingness over the enlargement of the EU and NATO into former Soviet states. As witnessed in the case of the Russia-Ukraine crisis, the close relations between Ukraine and the West resulted in the invasion of its sovereignty at the hands of Russia. Several countries including Finland and Norway’s attempts to join the EU will be a major security concern for the Russian Federation. 

Implications for EU and NATO 

It will be an exaggeration to say Russia’s EAEU is in a position to challenge or counter the EU as it did during the era of the cold war. In comparison to the EU, the internal trade within the EAEU countries is meager; in 2017, it only accounted for 14.5% of the total trade. But when we consider the EU, a massive sum of 64% of the total trade was made internally within the EU. However, Russia successfully assures that none of the Eurasian countries either aligns or lean toward western-oriented regional blocs.4

The formation of the EAEU has, in many ways, threatened the power dynamics in the Eurasian region, especially with that of NATO. NATO is currently suffering from various internal issues and is declining steadily in its internal relations among member countries. The declining power of NATO and the rising power of organizations such as the SCO (Shanghai Cooperation Organization) and EAEU will further help Russia achieve its interests in the Eurasian region. The recent conflict in Ukraine, however, has prompted countries with historical military neutrality like Finland and Sweden to join NATO who have officially submitted their bid for membership. If approved this will worsen the already testy relationship of NATO with Russia.

The presence of the Russian minority in the former Soviet republics can also play a significant role in expanding Russian hegemony. 

Russia can also use its energy resources as a political weapon against the EU and NATO enlargement, as most EU member states depend on the Russian energy sector. In this regard, the presence of the Russian minority in the former Soviet republics can also play a significant role in expanding Russian hegemony. Simultaneously, Russia also adopted a neighbourhood policy to strengthen its relations with immediate neighbouring countries under the leadership of Putin. 

Conclusion

A comparative analysis of the USSR and the EAEU will be a grave mistake. At the same time, the USSR was a supranational organization that consisted of various decision-making bodies governed by a common ideology. The EAEU is not governed by any such ideological constraints. It is also unique and different from the European Union as the Eurasian Economic Union has a permanent executive body in the form of the Eurasian Economic Commission. Russia is also not keen on giving any other supranational powers to the Union as it would undermine the country’s interests. 

On paper, the EAEU seems to be quite substantial; however, there are several internal tensions within the Union, mainly due to the enormous economic disparity between Russia and the rest of the members. 

Concerning all such parameters, it can be assumed that the transition of the Soviet Union into the Eurasian Union has not been successful. However, it is still too soon to write off the EAEU. We might see the EAEU rise to a prominent position shortly and be an equally competitive economic union similar to that of the European Union. 

(About the Authors: Noyingbeni Odyuo is a Research Student at the Post Graduate Centre, Department of Political Science, St. Joseph’s College (Autonomous), Bangalore, Karnataka. Dr. Karamala Areesh Kumar teaches international relations and World Politics at St. Joseph’s College (Autonomous), Bangalore, Karnataka.)


References:

  1. Charap, S., Shapiro, J., & Demus, A. (2018). Rethinking the Regional Order for Post-Soviet Europe and Eurasia. Rand Corporation.
  2. Ibid
  3. Baumgartner, L. C. C. S. (2015). Russia’s Strategic Window of Opportunity in Eurasia. Institute for National Security and Counterterrorism.
  4. Perovic, J. (2018). Russia’s Turn to Eurasia. Centre for Security Studies, 6(5). https://doi.org/10:3929/ethz-b-000284930.
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