Heritage Foundation on June 14, 2013, published an essay by Dr. Ariel Cohen on Putin’s plan for a Eurasian Union (EAU). Excerpts below:

EAU is the next in a series of Russian initiatives to reassert control over the former Soviet space. The Eurasian Union of Russia, Kazakhstan, and Belarus, if it follows the course that Russia will set, could threaten regional stability and undermine economic and political freedom in Eastern Europe and Central Asia. The EAU will also likely influence the sovereignty, independence, and political orientation of neighboring countries. The U.S. should work with its allies and friends in Europe and Asia to balance the Russian geopolitical offensive and protect U.S. and Western interests.

In the fall of 2011, Russian President Vladimir Putin proposed forming a Eurasian Union (EAU) with Kazakhstan and Belarus. In November 2011, the presidents of these three countries signed an agreement to launch the Eurasian Union and make it fully operational by 2015.

Stretching from the Polish border to the Pacific, the length of the former Soviet Union, the new Eurasian Union will be the nucleus of a larger transnational entity. Russia, Kazakhstan, and Belarus are uniting their economies, legal systems, and customs services to create a stronger Eurasian global player. They are coordinating their militaries through the Collective Security Treaty Organization (CSTO), and Putin is pushing for more coordination of their security services. This geopolitical consolidation will likely affect their neighbors’ sovereignty, independence, and political orientation. Armenia, Georgia, Kyrgyzstan, Moldova, Tajikistan, and Ukraine may be considered for future membership in the Eurasian Union.

A Eurasian Union that evolves into a Russian sphere of influence would…likely monopolize regional security, could threaten regional stability, and undermine economic and political freedom in Central Asia and beyond. U.S. policy should hedge against such efforts and make the case that an open economic environment offers a greater prospect for regional development. Such an approach would serve U.S. interests and create a better environment for a peaceful and prosperous Central Asia. The U.S. should organize an interagency effort to promote good governance and rule-based market economics as well as to combat efforts to close markets to the West.

The high-level leadership, speed, large staff, and considerable funding set the Eurasian Union apart from past integration efforts. In 2010, Russia, Kazakhstan, and Belarus implemented a uniform external customs tariff and adopted a customs code. In 2011, they lifted internal border controls. In July 2012, they inaugurated the Single Economic Space and a Eurasian Economic Commission in Moscow to administer it.

The Eurasian Union is based on two major documents: the Customs Code and the Codified Agreement on the Customs Union and Common Economic Space, which spell out the legal rules and norms for the functioning of a common market. This is a major break with past integration efforts, which generated hundreds of vague, fragmented agreements that largely remained unimplemented.

The key institution is the Eurasian Commission, which was launched in July 2012. Similar to the Commission of the European Union, its main responsibility is to ensure smooth operation of the common market by enforcing rules and regulations and to carry out initiatives for further integration.

Unlike the EU, the EAU Commission will make decisions by majority vote, not by consensus. Of course, Russia will dominate the decision-making process with its 57 percent vote, while Belarus and Kazakhstan have 21.5 percent each.

The Eurasian Union can be seen as a “soft power”—primarily economic—project. Russia hopes to translate its relatively large population, power, wealth, and size into greater influence around its periphery. With 600 years of empire building behind them, the Russian leaders are well aware that they must back up this influence with a hard power (military and security) component. The Collective Security Treaty Organization (CSTO) charter signed in 2002 entered into force in 2006, when its members appointed a secretary general to lead the organization. The CSTO includes the other Customs Union members—Belarus and Kazakhstan—as well as several potential members: Armenia, Kyrgyzstan, and Tajikistan. Uzbekistan withdrew from the treaty in July 2012.

As a military alliance, the CSTO is dominated by the Russian armed forces, which maintain military bases in Armenia, Kyrgyzstan, and Tajikistan. Russia also controlled until recently the Gabala radar station in Azerbaijan; three military bases in Abkhazia and one base in South Ossetia, regions of Georgia that are occupied by Russia; ground forces in Transnistria, Moldova; an infantry division in Tajikistan; and a naval base in Sevastopol, Ukraine. The Russian Federation is currently spending $800 billion to reform and rearm the military, which will force the CSTO to adapt the alliance to the context of Eurasian integration.

In February 2009, the CSTO agreed to form the Rapid Reaction Forces (KSOR), a permanent combat-ready military component for crisis response. As one military expert writes, the alliance is moving toward establishing a unified command and empowering the Joint Chief of Staff in charge of CSTO military forces, effectively creating a military arm of the Eurasian Union. Russia’s airborne forces, which constitute the majority of KSOR troops, are expanding from 7,500 to 20,000 troops by 2017. The Russian Defense Ministry nominated General Vladimir Shamanov, the popular commander of Russia’s airborne troops, to be the next CSTO Chief of Staff.

The CSTO has sought partnerships with NATO and the U.N. to boost its legitimacy, but its overtures to Washington have been unsuccessful, as the White House has been careful to avoid legitimizing Russia’s presence in the post-Soviet space.

Geographically, Russia has been a Eurasian power since its conquests of Central Asia, Siberia, and the Far East in the 16th–19th centuries. The Russian Empire undertook numerous campaigns to gain territories in the Caucasus and Central Asia, taking Georgia, Armenia, and Azerbaijan from the Ottomans and the Persian Empire and bringing to heel the khanates of Khiva, Khorezm, and Bukhara in the 19th century. However, Eurasianism as a political ideology emerged after the Russian Revolution of 1917. The Russian émigré thinkers formulated a third way for Russia between East and West and between capitalism and socialism. The idea never fully developed due to the predominance of Leninism.

Debate on Eurasianism reemerged following the Soviet collapse in 1991, dividing those who favored integration with Western Europe and the U.S. and those who argued that Russia should focus on dominating Ukraine, Belarus, and the Eurasian “heartland,” including Central Asia and the Caucasus, in opposition to the West.

Yevgeny Primakov, who served as director of Russia’s Foreign Intelligence Service (1991–1996), foreign minister (1996–1998), and prime minister (1998–1999) envisioned the emergence of a multipolar world, in which American influence would be first diluted and then opposed. He envisaged future integration of countries with Russia. He also actively supported and personally managed Russia’s collaboration with anti-Western states—such as Iraq, Iran, and China—to promote a multipolar international order. The 1996 treaty of integration with Belarus, which created the Union State, was post-communist Russia’s first major foreign policy step to reintegrate the former empire.

Today, Moscow opposes Western attempts to reach out to the post-Soviet countries. Russia was even upset with the EU’s Eastern Partnership program, which was launched in 2009 to facilitate relations with post-Soviet states. President Dmitry Medvedev called for a “sphere of privileged influence” in the aftermath of the 2008 Georgia war, and his half-baked proposal of a treaty on European security failed to find support in the West.

Vladimir Putin’s promotion of the Eurasian Union in the fall of 2011 is a multipronged and strategic move aimed at:

1. Creating an independent pole in the perceived global multipolar system, consolidating the Eastern Slavic and Christian Orthodox demographic core with the industrial and natural resources potential of Kazakhstan;
2. Meeting the Chinese economic challenges, primarily in Central Asia; and
3. Opposing the Islamist expansion into Central Asia, the North Caucasus, Siberia, the Urals, and the Volga region.

Russia is also undertaking its own “pivot to Asia” for political and economic reasons. First, the Putin administration is tired of the Western leaders “lecturing” them about political freedoms and human rights. Second, as Russian trade with the EU stagnates and business with the U.S. remains abnormally low due to hostility, analysts point to the Kremlin spending $20 billion to host foreign delegations at the recent Asia–Pacific Economic Cooperation (APEC) forum in Vladivostok as a sign that Russia is turning away from recession-stricken Europe and toward Asia.

To date, the Eurasian Union is the most serious attempt by post-communist Russia to recreate a deeply integrated sphere of influence. The Russian elites already refer to it as Bolshaya strana (the Big Country).

…the project appears to head straight for the past—to Soviet-like integration.

This comes at a cost to Russia and Eurasia’s partners. The proposed union will likely divert its trade away from the rest of the world. According to one World Bank study, Kazakhstan actually lost real income per capita in 2011, mostly due to the Customs Union’s higher external tariffs, which hinder trade diversification.

The Eurasian Union may also harm the economies of neighboring non-members. Russia has been courting Armenia, Kyrgyzstan, Tajikistan, and Ukraine to join the organization, but Azerbaijan and Georgia have clearly indicated that they will not become members.
The Eurasian project flows not only from Russia’s preoccupation with influence and prestige in the post-Soviet space, but also from Russia’s need to adapt to the changing international environment. Thus, the Russians are apprehensive about the expected U.S. pullout from Afghanistan in 2014 and are determined to maintain security in the region. Russia’s goals in Central Asia include containing radical Islam and fighting narcotics trafficking.

Russia is striving to create a sphere of influence in Eurasia, making it more difficult for foreign powers, especially the U.S. and China, to operate in Central Asia, the Caucasus, or the western tier of the Commonwealth of Independent States (Belarus, Moldova, and Ukraine).

The Kremlin was frightened by “color revolutions” in Ukraine and Georgia and views them as U.S.-led conspiracies aimed at undermining Russian influence. Furthermore, some nationalists and Eurasianists view the revolutions as rehearsals by pro-American political forces to topple the current regime in Russia.

The Eurasian Union is modeled after the 19th century customs and currency unions, which were at the heart of spheres of influence in Central Europe. Whether the proposed union has a sound foundation and the potential to promote stability and prosperity in the post-Soviet space is debatable. To a significant degree, its success will depend on Russia’s willingness to play by the rules and to act as an impartial and reliable partner, not as a hegemon which manipulates the organization for its own gains.

Of course, Russia’s imperial past and endemic corruption undermine its trustworthiness and economic leadership. Russia ranks an abysmal 133rd in Transparency International’s Corruption Perceptions Index, 112th in the World Bank’s Doing Business index, and 139th in the Heritage Foundation’s Index of Economic Freedom.

The Eurasian Union will help Russia retain privileged access to resources and help to pull the post-Soviet states’ economies into a closer Russian orbit. Central Asia is rich in natural resources, especially energy, including oil, gas, coal, and uranium. Russian firms have invested heavily in the Kazakh energy sector and are active across the post-Soviet space.

In the West, Moscow has worked to obstruct the EU-backed Nabucco pipeline from Azerbaijan, which would bypass Russia, and has so far derailed the Trans-Caspian gas pipeline, which would bring Turkmen gas to Europe. The Nord Stream gas pipeline to Germany and the planned South Stream pipeline to European markets are part of Russia’s strategy to bypass transit countries in Europe, especially Ukraine, and enhance Europe’s dependency on energy supplies from Russia. The Eurasian Union includes an energy commission that will make it easier for Russia to promote and impose pipelines based on Moscow’s preferences.

Russia wants to become a major transit country for commodities and finished goods transported between Asia and Europe. The abolition of customs controls between Russia, Belarus, and Kazakhstan will help to increase transit between China and Western Europe. Thus, Moscow views the possibility of major land connections between China and the West via Central Asia (bypassing Russia) as a threat to Russian interests.

A new authoritarian, anti-Western, mercantilist Russian sphere of influence would recreate the dynamics of the 19th century Great Game between the Romanov Empire and the British Empire and of the 20th century Cold War. It could deny NATO and the U.S. strategic access to air, land, and sea lanes, or control them, as Moscow did during the Afghanistan campaign. This is not what the U.S. and NATO want.

Moscow is already demanding an end to the U.S. presence in Central Asia. It wants American forces out of the Manas Transit Center in Kyrgyzstan. Russia is also pressuring Ukraine to join the Customs Union and the Eurasian Union, which would effectively foreclose Ukraine’s European integration and future NATO membership. The geopolitical level playing field is a sine qua non of American political engagement, just as Washington does not seriously oppose Moscow’s current deep economic involvement in Cuba and Venezuela.

Russia uses all elements of state power in Eurasia, while the U.S. and its allies limit themselves primarily to diplomacy.

The future of the Eurasian Union holds many unknowns. For example, Russia is unlikely to reverse the gradual decline of Russia’s economic influence in Central Asia and the Caucasus. Russia has already lost economic ground to China and will likely continue to do so because it lacks comparative advantages in most sectors except energy, military, and nuclear industries.

Today, Moscow’s attempts to define the rules of the Eurasian geopolitical game are adversely affecting U.S. interests. The Kremlin is excluding American security and economic interests by using force, covert action, corruption, and non-customs trade barriers and by undermining the rule of law.

Russia will attempt to construct its own ideology and define its sphere of influence in opposition to free market, liberal values and their champions—Europe and the U.S.

This need not happen. It is in the interests of the United States and the peoples of Russia and Eurasia to ensure that values of personal and economic freedom flow freely and are not subverted by expansion of Islamist radicalism or by authoritarian powers, such as Russia and China. The West should be concerned that liberty may suffer from Russia’s quasi-imperialist agenda in the post-Soviet space. Since the fall of 2011, the Russian government has criminalized unauthorized protests, expanded the definition of espionage, and made it harder for nongovernmental organizations (NGOs)—especially those with foreign financing—to operate within the country. One can predict that the suppression of democratic values, organizations, and activists will be one of the Eurasian Union’s principal priorities.

The U.S. should develop a hedge that would protect its national interests in the Central Asian and other former Soviet countries and promote constructive development. It would also be to Russia’s benefit if her neighbors developed into functioning, prosperous states in partnership with the U.S. Such ties could open avenues for economic and security cooperation, bringing jobs and business opportunities to American firms, and peaceful civic and economic development to peoples of the region. In fiscal year 2011, the United States gave $47 million to Eurasian countries and $50 million to Eastern European countries. The vast majority came from the U.S. Department of State and the U.S. Agency for International Development (USAID). Aid from the Department of Defense and the Department of Energy is comparatively low and inconsistent, fluctuating greatly from 2001 to 2011. The majority of the money from State and USAID goes to “stabilization operations and security sector reform.” However, following the U.S. withdrawal from Afghanistan, Washington will be in a much weaker position to promote development in a region where violent Islamism, poor governance, corruption, and drug trafficking are growing problems.

To remain geopolitically relevant in the 21st-century Eastern Hemisphere geopolitics, the Obama Administration should:

Prepare for involvement in the heart of Eurasia after the drawdown of the U.S. and NATO troops in Afghanistan. The U.S. should not abandon the field to Moscow or to Beijing, its de facto regional competitor.

Combine the Central Asia/Afghanistan and Russia interagency task forces. The combined task force, coordinated by the National Security Council, should systematically analyze U.S. strategic priorities and formulate long-term U.S. policies in Russia and Eurasia, including opposition to Moscow’s neo-imperialist policies. The task force should develop and integrate the Eurasian strategy, including the New Silk Road strategy, with the “pivot to Asia” approach. To date, this effort is lacking. Such an interagency approach would span the Departments of Defense, State (including USAID), Energy, and Commerce and the intelligence community. Despite declining budgets, the U.S. should put in place intelligence and Special Operations platforms and contingencies to collect critical information and surgically fight violent Islamist threats in Central Asia past 2014. The United States should also develop an NGO component to promote good governance, rule-based market economics, individual rights, and media freedom.

Boost regional geopolitical, linguistic, religious, and historical expertise in the U.S. government, while taking into account limited budgetary resources. Since the end of the Cold War, regional expertise has declined in the intelligence community, the military, and the State Department. While America should remember that geography and history dictate that these countries maintain good relations with Russia and China, Washington should not see these triangular ties as a zero-sum game. It should appreciate and encourage the “multi-vector policies” of the Central Asian states, while reaching out to secular nationalists and pro-Western circles. Thus, the U.S. and its allies should resist Russia’s strong-arm tactics to carve out a 19th century–style sphere of influence.

Promote continuous bilateral U.S. involvement in Eurasia. This includes strengthening bilateral diplomatic, political–military, and economic partnerships and regional cooperation with key states, especially Azerbaijan, Georgia, Kazakhstan, Ukraine, and Uzbekistan. Strengthening these cooperative relations should be America’s top priority in the region.

Expand economic and political freedom through international organizations. The U.S. should work through the Organization for Security and Cooperation in Europe, World Trade Organization, and other institutions to protest Moscow’s strong-arm tactics in imposing the Single Economic Space and Eurasian Union integration and to draw attention to Russia’s quasi-imperial policies.

Emphasize economic freedom. The U.S. should work to prevent the Eurasian Union from closing market access and expanding state sectors. The U.S. should oppose exclusion of U.S. weapons sales and limitations on investments in energy and other natural resources, which is already happening in Russia. The U.S. should also oppose non-tariff barriers through WTO adjudication procedures and condition Russia’s OECD accession on economic transparency and the rule of law for all Customs Union members.

Employ U.S. public diplomacy tools, including international broadcasting and exchanges, to communicate the pre-tested key messages to elite and mass audiences in the region.

Despite Moscow’s efforts to impose its will, the domination-bound, post-imperial mindset in Moscow will likely undermine economic and political integration through the Eurasian Union. This mindset makes it difficult for Russia to contemplate a truly voluntary, mutually beneficial integration or to allow its neighbors to prioritize relations with the U.S., EU, or China. Moscow promotes bilateral and regional integration to keep its neighbors in Russia’s orbit, strengthening Russian influence over their politics and constraining their ability to develop relations with outside powers.

Success in Central Asia may encourage Moscow to expand its control over the Caucasus and Eastern Europe, threatening the independence and pro-Western orientation of Azerbaijan, Georgia, and Ukraine—and even the Baltic states.

While some amount of Russian presence underpinning regional trade and development may be unavoidable to prevent the meltdown of weak and failing states into religious or narcotics-driven civil wars and anarchy, it is not in America’s interest to encourage unencumbered Russian hegemony in Eurasia for the reasons of regional and global balance of power. The U.S. should act multilaterally with its European allies, Japan, India, South Korea, and its Eurasian partners to balance the Russian geopolitical offensive.

—Ariel Cohen, PhD, is Senior Research Fellow in Russian and Eurasian Studies and International Energy Policy in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at the Heritage Foundation. Dmitri Titoff, a participant in the Heritage Foundation Young Leaders Program, provided invaluable assistance in the production of this paper.


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