The Eurasian Illusion

The Myth of Russia’s Economic Union

President Vladimir Putin and President Nursultan Nazarbayev of Kazakhstan at the Kremlin in December 2014. Maxim Shipenkov / Courtesy Reuters

On the first day of 2015, Belarus, Kazakhstan, and Russia officially launched the Eurasian Economic Union (EEU), a trade bloc that Moscow hoped would one day bring the former Soviet nations back together. The initiative, however, appears to be a failure. The EEU is nothing more than an illusion—and an unconvincing one at that.

For two decades now, Russia has called for the integration of former Soviet states as equal partners, as in the European Union. Several unsuccessful early attempts toward that goal included the Commonwealth of Independent States (CIS), now a largely defunct conglomerate of Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine, and Uzbekistan. Russia launched a new attempt in 2010, when it finally managed to produce a customs union with Belarus and Kazakhstan and planted the seeds for the eventual creation of the EEU. From the start, Moscow has voiced its hope that the organization’s economic agenda would ultimately expand to cover political integration as well.

But the idea of universally beneficial integration on equal terms has always been a façade. Long before the EEU was launched, it was clear that gross economic disparities among the group’s members would work in Russia’s favor, with other countries getting secondary roles. Before the ruble’s collapse in December, Russia accounted for 87 percent of the union’s total GDP and 83 percent of its population. By comparison, the EU’s largest economy, Germany, represents about 15.8 percent of its GDP and just six percent of its population. Even if the worst predictions for Russia’s economy come true in 2015—and its GDP contracts by eight percent, inflation spikes by 20 percent, and capital flight reaches $150 billion—the country will continue to dominate the EEU, representing about three-fourths of its total economic weight.

The EEU’s swift absorption of Armenia, which joined on January 2, did little to correct the imbalance, since the country has a GDP of only $10 billion (or less than one percent of the EEU’s total) and adds

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