THE SOUTHERN ENERGY CORRIDOR: A STRATEGIC PRIORITY FOR THE U.S.?, by Mamuka Tsereteli
ELECTION YEAR IN THE EURASIAN UNION AND THE EU'S EXTERNAL ACTION POLICIES, by Gaël Chataignère
MOSCOW STEPS UP PRESSURE ON CHECHNYA'S POWERFUL RULER, by Valeriy Dzutsev
THE CHALLENGES TO GEORGIA'S ENERGY SECTOR, by Ariela Shapiro
INGUSHETIA'S LEADER CLAIMS THE END OF INSURGENCY IN HIS REPUBLIC, by Huseyn Aliyev
GEORGIA FAILS TO OBTAIN VISA-FREE REGIME AT EaP RIGA SUMMIT, by Eka Janashia
ARMENIA'S AND GEORGIA'S PRIME MINISTERS IRON OUT RECENT STRAINS IN BILATERAL RELATIONS, byErik Davtyan
PARTY RESTRUCTURING IN KYRGYZSTAN PRIOR TO 2015 ELECTIONS, by Arslan Sabyrbekov
By Gaël Chataignère (05/27/2015 issue of the CACI Analyst)
EU policies toward the two junior members of the Eurasian Union are an indication of the EU’s struggle to balance its normative, geo-economic, and political interests in the former Soviet space. This April, Nursultan Nazarbayev secured a fifth term in office with a full 97.7 percent of the vote, prompting only a mild response from the EU. The European External Action Service simply reiterated the conclusions of the OSCE observation mission, and the importance of the EU’s partnership with Kazakhstan. Meanwhile, despite an ongoing diplomatic thaw, Belarus remains subjected to a comprehensive set of EU sanctions. This seeming paradox questions the consistency and priorities of the EU, just a few months before Belarus holds its own presidential election.
By Nurzhan Zhambekov (01/07/2015 issue of the CACI Analyst)
After the fall of the Soviet Union, the two largest Central Asian states of Kazakhstan and Uzbekistan took the initiative for Central Asian integration. In January 1994 an agreement was signed in Tashkent for the creation of a Central Asian Union, with Kyrgyzstan joining shortly thereafter. This marked the start of Central Asia’s integration process, aiming to develop and implement projects to deepen economic integration. Today, the idea of Central Asian integration is considered dead, despite numerous attempts primarily by Kazakhstan to revive it. The internal differences between Central Asian states, and their subjection to the influence of external powers, has made the prospect of regional integration increasingly remote.
By Arslan Sabyrbekov (01/07/2015 issue of the CACI Analyst)
On December 23, Kyrgyzstan signed an accession agreement to become a member of the Russia-led Eurasian Economic Union (EEU). The new union is an expansion of the Customs Union grouping together Russia, Kazakhstan, Belarus and now also Armenia and Kyrgyzstan.
Upon signing the new accord, Kyrgyzstan’s President Almazbek Atambayev expressed his hope that Bishkek will become a full-fledged member of the EEU by May 2015 and thanked his colleagues for fairly determining accession conditions. The treaty will now fully enter into force after its ratification by the member countries’ parliaments. Russia’s President Vladimir Putin welcomed Bishkek’s decision and noted that the new union will now have a combined economic output of US$ 4.5 trillion, bringing together more than 170 million people.
In the meantime, Bishkek-based civil society activists have issued a statement criticizing the political leadership’s quick decision to enter the EEU. According to them, the government has failed to engage in comprehensive public debate on the subject matter and made the decision behind closed doors. According to MP Omurbek Abdrakhmanov, an outspoken critic of Bishkek’s integration with Moscow, “no one has probably seen the text of the treaty except the country’s key political leadership. The Parliament was supposed to take a decision approving the initiative of the president to enter the Union, but the procedure was not observed. The text of an agreement consequential to the nation’s sovereignty was approved in half an hour.”
Bishkek’s EEU deal comes in the midst of the financial crisis in Russia. Over the last couple of months, the Russian currency has lost between 40 and 55 percent of its value against the Dollar and for the first time in history has even lost ground against the Kyrgyz Som. The ongoing depreciation of the Ruble means that millions of Central Asian migrant workers in Russia can send home less money. The Kyrgyz government is preparing for windfalls from abroad to fall by approximately US$ 1 billion. The decline in remittances, accompanied by massive government spending to keep the currency closer to the dollar, clearly poses a problem to the country’s already troubled budget. In addition, the ongoing financial crisis in Russia along with tougher regulations is already forcing a number of labor migrants to return home and join the pool of unemployed. According to Bishkek based economist Azamat Akeleev, “Kyrgyzstan lacks capacity to accommodate its returning work force and this will definitely lead to various social tensions in the future.”
The decline of the Russian currency is not only a concern for the dependent economies of the Central Asian states but risks undermining the overall stability of the EEU. In light of the ongoing crisis, the President of Belarus Alexander Lukashenko has demanded trade in the Union to be denominated in Dollars or Euros and not in Rubles. He has also sharply criticized Moscow over its trade dispute with Minsk. In response to Western sanctions, Moscow has recently banned imports of foodstuffs from the European Union and in order to prevent Minsk from reselling EU products to Russia, has halted imports of Belarusian milk and meat products through its territory, referring to alleged sanitary reasons. “Contrary to all international norms, we are being denied the right to transit goods from the territory of Belarus and all of this has been imposed unilaterally, without any consultations,” Lukashenko said.
Meanwhile, Kazakhstan’s President Nursultan Nazarbayev has also suggested that Russia’s isolation from the West over the crisis in Ukraine is creating tensions between Moscow and its closest partners. “The instability of world markets and the policy of sanctions will impact the process of building the Eurasian Economic Union,” said the Kazakh leader during his state visit to Ukraine. Contrary to the Kremlin’s position, the Kazakh President also spoke in support of the country’s territorial integrity and offered financial and energy based aid to the struggling government in Kiev.
These stark differences in positions is proof that Moscow’s capacity for influence might be shrinking. The Kremlin was able to draw two small states into the Union, Armenia and Kyrgyzstan, but its ability to transform the union into a broader alliance extending to the political and diplomatic arenas is unlikely to be realized, at least for the time being.
The author writes in his personal capacity. The views expressed are his own and do not represent the views of the organization for which he works.
By Oleg Salimov (01/07/2015 issue of the CACI Analyst)
Tajikistan assesses its potential for joining the Eurasian Economic Union (EEU), which came into effect on January 1, 2015. Pressure on Tajikistan to reach a decision on membership increased with the inclusion of Kyrgyzstan as one of the EEU’s forthcoming members. Tajik president Emomali Rakhmon proposed an in-depth study of the benefits of EEU membership for Tajikistan during the Eurasian Economic Community meeting in Minsk on October 10, 2014. As a result, the Central Asian expert club Eurasian Development in Dushanbe prepared an analysis of priorities which would stipulate Tajikistan’s successful integration into the EEU.
The experts’ list of issues which Tajikistan must address in its consideration of EEU membership includes Tajikistan’s low production output; its lack of infrastructure and unreliable railroad communication with other EEU members; energy security and continuing disagreement with Uzbekistan; the security and interests of Tajik labor migrants; compensation for short-term losses in Tajikistan’s custom duties; the border dispute with Kyrgyzstan; the preservation of transit cooperation with China; and taking stock of Tajikistan’s tourism industry potential. The report overall emphasizes Tajikistan’s immediate economic concerns.
Eurasian Development executive director Guzel Maitdinova in her expanded commentary on the report and Tajikistan’s potential membership pointed out the EEU’s fundamentally economic basis. Maitdinova confronted the critics of Tajikistan’s EEU membership who suggest it will inevitably imply a loss of sovereignty for the republic. Maitdinova insisted that the EEU should not be compared with the European Union which, unlike the EEU, functions through a common parliament and pursues a single model of political development for all members. Another point is the equal ability of all members to block any decision or resolution of the EEU. Also, the EEU foresees equal representation for all members regardless of the country size or membership dues which are in turn divided proportionately. Currently, Russia pays 88 percent of the total membership dues, Kazakhstan 7.3 percent, and Belarus 4.7 percent. Favoring the EEU, Maitdinova stressed the importance of Tajik labor migrants for the country’s economy, which would lose the extensive EEU labor market to Kyrgyz migrants if Tajikistan refuses to join. Maitdinova believes that EEU membership will enhance Tajikistan’s transit cooperation with China as it opens unlimited opportunities of the Eurasian market for China.
The newly founded EEU is a successor to the Eurasian Economic Community (EEC) established in October 2000 by Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The main task of the EEC was the formation of a Customs Union and creating conditions for a common free market zone among its members. October 10, 2014 marked the last day of the EEC. The agreement between Belarus, Kazakhstan, and Russia on the EEC was signed on May 29, 2014. The primary objective of the EEU, alongside free trade, includes a common labor and service market and unrestricted capital movement. Also, in addition to the existing common customs regulations, the EEU will develop a common monetary, taxation, and trade policy.
Armenia, which possessed observer status at EEC, and Kyrgyzstan rapidly decided to join the EEU (Armenia became a member on October 10 and Kyrgyzstan signed its association agreement on December 23, 2014). Tajikistan has reviewed and analyzed Armenia’s and Kyrgyzstan’s integration process. Armenia had to formally waive its territorial claims on the Nagorno-Karabakh region but received sizable custom duties privileges and Kyrgyzstan was able to secure US$ 1 billion assistance from Russia through the creation of a Russian-Kyrgyz Development Fund. The Eurasian Development report discusses the possibility of similar financial incentives for Tajikistan and expects increased engagement from other members in the resolution of its territorial disputes with Kyrgyzstan. Also, experts anticipate an EEU interest in developing Tajikistan’s hydroelectric power resources.
While other members of the EEU, Russia in particular, are supportive of Tajikistan’s admission, there is a lack of commitment to financial assistance. Russia’s ambassador to Tajikistan, Igor Lyakin-Frolov, only expressed hopes for Tajikistan benefiting from special custom duties status in a manner similar to Belarus and Kazakhstan or a development fund similar to that of Kyrgyzstan, otherwise remaining highly reserved on the outlook of financial assistance to Tajikistan. Olga Gavruk, Belarus’ ambassador to Tajikistan, primarily sees Tajiks as a labor force for other EEU members. Such a vision implies a further dependency of the Tajik economy on migrants’ remittances and the continuing stagnation of Tajikistan’s industrial complex.
Tajikistan has made the first steps towards integration with the EEU. However, the consequences of EEU membership for the republic are far from clear. Tajik experts have outlined major areas for comprehensive economic research, which must involve various governmental agencies, think tanks, and the business community. The process of EEU integration will include adjustment of specific domestic and foreign policies, legislative changes, considerable investments, and short-term losses. Eventually, Tajikistan’s dependency on Russia and Kazakhstan not only through labor migrants, but also through a significant amount of trade (according to the Tajik Statistics Agency, Russia and Kazakhstan respectively were first and second among Tajikistan’s trade partners in 2013) might persuade the country to opt for membership.
The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.