The deepening crisis in Ukraine over whether to integrate economically with the European Union or Russia is both sowing worry and sparking anti-Russian defiance in Georgia, arguably the last steadily pro-Western Eurasian country east of Moldova. Yet, according to new Georgian Prime Minister Irakli Gharibashvili, the Ukraine situation will only serve to further Georgia's integration with the EU.
This year, Georgia has seen two fellow ex-Soviet republics drop out of the pro-Europe club. First, next-door Armenia made a sudden choice to join the Moscow-led Customs Union; now Ukraine has taken a time-out from plans to sign off on a landmark agreement with the European Union.
The loss of Ukraine, arguably the Slavic country with which Georgian ties are chummiest, leaves some feeling a tad vulnerable.
“Ukraine would have been a very serious partner for us at the Vilnius summit. You stand more steadily on your feet when you have such a large country by your side,” said Tina Khidasheli, a senior parliamentarian for the ruling Georgian Dream coalition, Interpressnews reported.*
Usually wary of Moscow-led initiatives, Uzbekistan has suddenly expressed cautious interest in joining the Customs Union of Belarus, Kazakhstan and Russia – the trade bloc Russian President Vladimir Putin has made a key feature of his foreign policy.
Senate Speaker Ilgizar Sobirov, the powerful head of the Uzbek parliament's upper chamber, showed interest in joining the Russia-led group on November 12 after meeting a delegation from the Russian parliament's upper chamber, the Federation Council, Russia's Itar-Tass news agency reported.
Sobirov reportedly said Uzbekistan holds a "positive" attitude toward possible membership in the trade body, which lately has been marked by increasingly rancorous internal disputes. “I think we shall support,” Itar-Tass quoted him as saying, in a report light on details.
Uzbekistan's interest in the Customs Union makes sense on paper. Russia is the country’s largest trade partner, according to statistics distributed in Uzbek media by the State Statistics Committee.
Russia is also the primary magnet for the millions of Uzbek labor migrants who sent about $5.7 billion home in remittances last year, or the equivalent of 16.3 percent of GDP.
Two panels this month, one in Washington and the other in Istanbul, illustrate the broad gap in thinking on Central Asia between foreign policy leaders in Washington and mid-level practitioners more closely linked to the region.
"The US must take initiative to create a long-term strategy for the region. It should bring the New Silk Road to the region, because if we do not, others [Russia, China] will fill the void," Adib Farhadi, a visiting Afghan scholar at the Central Asia and Caucasus Institute (CACI) at Johns Hopkins University, said, summarizing the sentiments of his fellow panelists in Washington.
Just a few days earlier in Istanbul, however, one panelist derided Washington's New Silk Road concept – unveiled by then Secretary of State Hillary Clinton in mid-2011 – to widespread agreement: "The New Silk Road was a strategy, then an initiative, now I guess it is a vision. It should be called an illusion and ignored. It was created by outsiders without reference to what is going on in the region."
The Atlantic Council and CACI jointly hosted the Washington panel, entitled "The New Silk Road Project: A New Strategy for Afghanistan and Central-South Asia," on October 9. The previous week, the US Congress-chartered Hollings Center for International Dialogue gathered 30 policy experts and development practitioners from Central Asia, Afghanistan, Turkey and the West for a dialogue on "Central Asia's Regional Challenges." The Hollings Center event on October 3-5 was held under the Chatham House Rule, thus participants’ names have been withheld.
The presidents of Russia, Kazakhstan and Belarus sat down on October 24 in Minsk to grapple with the thorny problems facing their free trade zone – from trade barriers to confusion over Customs Union expansion. It was a tense meeting.
President Nursultan Nazarbayev of Kazakhstan – usually a staunch Russian ally – was in a combative mood, accusing Moscow and Minsk of erecting unfair barriers to trade, describing the Customs Union’s Russian-dominated regulatory body as politicized, and urging caution in Moscow’s efforts to welcome new members.
Nazarbayev told Vladimir Putin and Aleksandr Lukashenka that he noted “positive results” from the Customs Union but urged an open dialogue on “shortcomings,” including “foreign trade disproportions” and “serious difficulties” for Kazakhstan to access Russian and Belarusian markets.
As EurasiaNet.org reported this month, there is strong opposition to Customs Union membership in some quarters in Kazakhstan. Upon accession in 2010, increased trade was touted as the chief benefit, but so far the result has been a flood of imports into Kazakhstan from Russia, plus a derailed bid to join the World Trade Organization.
Putin was conciliatory but vague, describing it as “necessary, of course, to work on eliminating all exemptions and all mutual preferences” and “necessary to create equal conditions.”
President Vladimir Putin’s state-of-the-nation address today is being parsed for details on how he proposes to protect Russia’s "national and spiritual identity," boost the economy and military, and what, if anything, he plans to do about Russia’s runaway corruption.
But two comments in particular will interest Central Asia watchers.
There will be no more crossing from former Soviet republics into Russia without an international passport, Putin declared about halfway through the speech:
We still have a practice that the citizens of CIS states enter the Russian Federation using their domestic passports. […] In such circumstances, when the citizens of other countries enter using their domestic passports, it is almost impossible to ensure effective immigration control. I believe that no later than 2015 entry to Russia should be allowed only with the use of foreign-travel [passports], not the domestic passports of other countries.
("Domestic passports" are the main form of internal ID used in most former Soviet republics.)
So, by 2015 the millions of migrants from Central Asia and the Caucasus traveling to Russia for work will have a new hurdle to jump over.
But a few minutes later, Putin flags an exception:
However, without a doubt, within the framework of the Customs Union and the Common Economic Space the ... current system will continue to apply – maximally simplified rules for crossing the border and staying on the territory of member countries of the Customs Union and the Common Economic Space.
After 11 years of negotiations, Tajikistan is set to join the World Trade Organization (WTO) within the next few months.
President Emomali Rakhmon was in Geneva on Monday to sign a package of membership agreements that commit Dushanbe to opening its markets and standardizing import tariffs. Tajikistan’s rubberstamp parliament must ratify membership by June 7, 2013. The country will become a WTO member 30 days after ratification, making it the trade body’s 159th member.
“Today constitutes a landmark in Tajikistan's history and lays solid foundations for further promotion of sustainable social and economic growth,” Rakhmon said at the signing ceremony. “Tajikistan will use its WTO membership as a means of fostering future economic growth and prosperity.”
According to the WTO, Tajikistan ranks 143 globally in exports of goods (approximately $2 billion in 2010) and 140 ($2.7 billion) in imports, and trades primarily with China, the EU, Russia, other Central Asian countries, and Turkey.
In Dushanbe, one analyst affiliated with the president’s office hailed accession. By forcing Tajikistan to modernize its legislation, membership will help attract international investors, Saifullo Safarov, deputy director of the Center for Strategic Studies under the President, told Russia’s Nezavisimaya Gazeta.
But a Russian analyst said Dushanbe has sought membership out of its desire for prestige, rather than economic interests.
For most Tajiks, Russia plays a huge role in their families’ well being: Tajikistan’s economy is deeply dependent on remittances sent from its labor migrants in Russia; Tajikistan imports 90 percent of its oil products from Russia; and twenty years after the fall of the Soviet Union, Russia remains one of Tajikistan’s largest trade partners.
On September 26, politicians from both countries met in Dushanbe to discuss economic integration. Their roundtable came the week before a scheduled visit from the architect of post-Soviet reintegration himself, President Vladimir Putin. At a widely publicized roundtable, the two sides cheerfully discussed the idea of Tajikistan’s accession to the Moscow-led Customs Union of Belarus, Kazakhstan and Russia. It turns out the topic will be on Putin’s agenda – a touch of brotherly bonhomie among a set of thornier subjects – and apparently has Dushanbe’s full support.
"The admission of Tajikistan to the Customs Union will be a significant step towards economic integration with Russia and other Customs Union members," said a statement by Tajikistan’s Ministry of Economic Development and Trade, carried by Interfax. The ministry noted that membership would guarantee supplies of petrol and basic foodstuffs. (President Emomali Rakhmon had just urged his citizens to stockpile grain for the winter ahead.)
Kyrgyzstan’s Russia-friendly government is getting closer to the point of no return.
Two weeks after Russian Prime Minister Vladimir Putin launched his proposal for a new Eurasian Union based on the Moscow-led Customs Union with Belarus and Kazakhstan, Kyrgyzstan has taken another step toward accession with the formation of a working group to resolve outstanding issues.
On October 17, Acting Prime Minister Omurbek Babanov, a Customs Union supporter, noted that Kyrgyzstan still had some issues to work out before joining. Among the problems Babanov mentioned is “finding work for the tens or hundreds of thousands of people who will be left jobless when we enter the Customs Union.”
One might think losing so many jobs would be a big enough concern to rule out accession for a country with widespread unemployment and an economy that shrank in 2010.
But wishful thinking is all the rage. The leading presidential candidate in next week’s elections, Almazbek Atambayev (Babanov’s boss and for all intents and purposes the man who stands to gain the most from a quid pro quo with Moscow), has promised the Customs Union will contribute to “the development of manufacturing.”
The inevitability of Kyrgyzstan caving in and joining the Russia-dominated Customs Union is looming ever larger on the horizon.
Speaking in Brussels this week, President Roza Otunbayeva may have issued her most explicit position on the issue to date.
Joining the Customs Union “is highly important to us. Or rather, you could say that they are pulling us in, because everything produced in Kyrgyzstan is aimed at the markets of Kazakhstan and Russia. Moreover, our labor and capital is oriented in exactly that direction.”
Kyrgyzstan has until now thrived on being a transit nation through which cheap Chinese goods could be re-exported. Since both Kyrgyzstan and China are members of the World Trade Organization, the former benefitted to an extent, according to Otunbayeva.
As she then ruefully notes, with the appearance of the fenced-off Customs Union of Russia, Belarus and Kazakhstan, there is no longer anywhere to send these goods:
“With the existence of the Customs Union, the door to Kazakhstan is closing firmly and so membership for us has become an issue. It would be good if Russia could also join the WTO as soon as possible.”
Curiously, this puts opponents to Russia’s WTO membership in a key position to affect the fate of struggling nations, like Kyrgyzstan and another potential Customs Union aspirant, Tajikistan.
The consensus that joining the Customs Union is a must has become common among Kyrgyz politicians, although some experts have warned against it.
At the main border crossing heading from Kyrgyzstan to Kazakhstan, freight trucks line the road for hundreds of meters for a days-long wait. Cars, taxis and minibuses jostle for the remaining road. The modest bridge spanning the Chui River has been largely gridlocked throughout 2010.
Cross into Kazakhstan, and there are no queues. A crowd loiters around the gates, looking for passengers, family members, business partners. The whole scene is reminiscent more of a prison gate than an international border crossing.
Just twenty years ago, the Chui River was the trivial line between two brotherly republics of the Soviet Union. Now, a new Customs Union of Belarus-Kazakhstan and Russia (CU) intends to secure those countries from cheap transit goods, criminal activity, smuggling, and even anti-government unrest perceived, across this newly strengthened frontier, as emanating from Kyrgyzstan.
Of the 11 border crossings between Kyrgyzstan and Kazakhstan, six are currently closed, Kyrgyz customs agents say, and Kazakhstan has imposed tightened restrictions at two more.
Fifteen kilometers east at Ak-Tilek, a simple printed sign taped to a shuttered gate indicates that this key freight crossing is closed. In addition to locally produced goods, huge amounts of consumer products transiting Kyrgyzstan from China were once transited here, feeding local economies on both sides of the border.
“All that traffic is now diverted to Kordai and is completely backed up,” reports the lone Kyrgyz customs officer at Ak-Tilek. Relief probably will not come soon. “The Kazakhs say they are reconstructing their facilities, and they say they won’t open again for a long time. Probably a year.”