From all the sarcasm and serious debate going on about the Eurasian Economic Union (EEU), it has been signed and is in full force of ratification by Russia’s, Belarus’s and Kazakhstan’s parliaments. The reason for such lively discussion has been due to its politically symbolic nature. Officially, the EEU is an international organization of regional economic integration made to eliminate barriers to trade and harmonize economic interests. However, many see this as the return of Russia’s empire, causing some like then U.S. Secretary of State Hillary Clinton to seek effective ways prevent it. Contrary to this Cold War mentality, the EEU has some serious economic and social implications for the partnering states, both positive and negative. Looking at it from Kazakhstan’s perspective, the EEU offers more bounties to the leadership than obstacles.

Why Join Anyways?

Kazakhstan’s President Nazarbayev proposed the idea at a speech at Moscow State University in March 1994. He suggested that this integrationist scheme be based on the principles of добровольность (freewill) and равноправие (equal rights). Admittedly, Nazarbayev’s comments do not come out of the blue. Just 23 years ago Kazakhstan was a Soviet Republic subservient to the Kremlin’s industrial and resource agenda. Now, a thriving regional power, Nazarbayev aims to secure the country’s modernization plan without being seen as a Russian puppet.

Kazakhstan signed up to the Russian-led organization, which aims to counter the economic appeal of the EU, the United States and China, while cementing its influence in Central Asia. Stretching from the borders of the EU to those of China, it has colossal geographic coverage for trade, so it becomes clear why Putin accelerated the integration process in his third term. Kazakhstan’s own incentive is also rooted in its interest to secure access to the mainly-Russian market and have a more determined voice with its ever-tightening trade relations with China.

China has increased investment in Kazakhstan by building oil pipelines and recently purchasing a 5 billion dollars share in Kazakhstan’s Kashagan oil field in the Caspian Sea. Anna Matveeva, a senior researcher in the Department of War Studies at King’s College London, believes that Kazakhstan’s most complicated and important relationship is with China and “Astana hopes that the EEU can actually strengthen its hand in dealing with it.”

Apart from flexing its muscles to Beijing, Kazakhstan will have access to more labor, capital, services and goods. Combined estimates of gross domestic product for the EEU stands at 2.7 trillion dollars with 170 million potential consumers, yet many still argue that this comes at a price for Kazakhstan.

Kazakhstan’s “Multi-Vector” Foreign Policy at Risk

Using its energy resources and foreign policy wisely, Kazakhstan has become a model of governance for the region and its leadership is determined not to compromise these important political levers. Many of its successes are because of Astana’s famous “multi-vector” agenda. For example, Kazakhstan has been able to get more out of the strategic partnership with its Slavic neighbors by buying military technology. This trade relationship will most likely deepen the Russian supply if the EEU continues on its path. But looking at Kazakhstan’s track-record in the Customs Union, the World Bank has suggested that Kazakhstan is losing out on productivity in the long run as it trades less with the rest of the world and imports less technology from the more technologically advanced European Union.

Other than securing more military contracts, Moscow is deeply suspicious of China’s rise. It sees Beijing as a threat to the lucrative partnership and it has reason to believe this. Last year trade turnover between Astana and Beijing amounted to 28.5 billion dollars, surpassing that of Russia and Belarus. However, even with such a profitable transaction it is unlikely that a Russian-led Union or a Chinese economic project will monopolize Astana’s attention.

But some still think that deeper integration can mean a loss of sovereignty. According to Dmitri Trenin, director of the Carnegie Moscow Center, “the sovereignty that Kazakhstan agrees to give up will have to be compensated by the voice that Kazakhstan will receive in the councils of this integration organization, which will mean that Russia will have to give Kazakhstan a little bit more. So there's a trade-off in other words.”

On a similar note, Trenin explains that, “because there is a clear possibility of Russia dominating the Union, this domination will be preventive because no one would like to be dominated. What I see happening is a fairly modest and yet useful economic arrangement which will give something to everyone”. This assurance is also enshrined in the Union’s Treaty in Article 30 that roughly states each partner country will not be hindered from concluding international treaties with third-party countries. From all the talk going on, some Kazakhs are still at bay with the project.

It’s Purely Economic, I Swear

The annexation of Crimea has failed to reassure Kazakh’s of Russia’s overall goal. The justification behind the use of force, the responsibility to protect Russian speakers, can easily be used in northern Kazakhstan’s predominantly ethnic-Russian population. Nargis Kassenova, director of the Central Asian Studies Center at Kimep University in Almaty, says “there is a new political and psychological environment created by the Ukrainian crisis and the fear of Russia shaping Kazakh leadership in foreign policy.” This suspicion has also been felt by ordinary people. A small demonstration, in the form of an Anti-Eurasian Forum, was held in Almaty to protest against the signing of the EEU, calling it a neravniy brak (unequal marriage) and Russian imperialism.

Whether the EEU furthers Putin’s geo-political goal of gathering Russian lands is debatable, but ultimately irrelevant for Nazarbayev. The borders between Kazakhstan and Russia are drawn, people near the border can easily commute and it is highly unlikely that Putin will grab northern Kazakhstan, thereby compromising an important and strong alliance. Russia needs to reassure Kazakhstan and use its diplomacy more frequently, while both have to cooperate within the EEU to demonstrate their skills at being more competitive than their Western and Chinese rivals.

Jakob Muratov is an intern at the Carnegie Moscow Center and a student of political economy at King’s College London. You can follow him on Twitter: @jakobmuratov

By:
  • Jakob Muratov