New Observatory on the Eurasian Economic Union (EEU)

Within LIBERTAS – European Institute GmbH, there is from beginning of April 2015 an observatory on Eurasian Economic Union (EEU) affairs – ranging from the history of Eurasianism until the most topical developments like e.g. the possible preparations for a common Eurasian currency. It is mainly intended for access out of the European Union and for scientific purposes, but it is open for requests and cooperation throughout the world. The EEU is at present composed of Russia, Belarus, Kazakhstan and Armenia (since 1.1.2015); Kyrgyzstan will join on 1.5.2015. The Russian president V. Putin has said he wants the whole former Soviet republics, except the Baltic Republics, to form the Eurasian Economic Union.

This EEU Observatory will start working on an informal basis, and is headed by Ofelya Sargsyan M.A. The Armenia-born political scientist is also Junior Editor of European Union Foreign Affairs Journal (EUFAJ); see http://www.libertas-institut.eu/de/EUFAJ/Ofelya_Sargsyan.pdf. The output will be an archive and database, articles, discourses and lectures, advice and papers for government level, non-governmental organisations (NGOs), conferences, company purposes etc. Any later news will be published on Facebook, on the blog https://libertasblogs.wordpress.com, or on www.eufaj.eu as well as in EUFAJ.

The EEU cannot be compared directly to the European Union, neither with its background, nor with the political system of its member states and the degree of voluntary participation. There is a strong knowledge deficit about it in the EU and other countries. While it is totally legitimate to integrate also economies of CIS countries, there is, however, also sometimes the call for a new ‚empire‘ behind the attempts to set up a Eurasian Economic Union.

Russia and the Eurasian Union: Mission Impossible?

By Hans-Jürgen Zahorka
Chief Editor, European Union Foreign Affairs Journal (EUFAJ)
http://www.eufaj.eu

The Russian president Putin may be a political chess player, but he will fail at the very end. He wants to restore glory for his country, and therefore he undertakes a lot:
– blaming the Americans and the Europeans for anything which does not function in his country, including a growing authoritarianism and repression of non-violent opposition, including as well the stigmatisation as „foreign agents“ of any non-governmental organisation which has contacts abroad (and all open-thinking NGOs have them), and following a media policy which is absurd and where critical journalists often have to pay with their lives and health,
– gathering a lot of compliments from most of his compatriots after the conquest of Crimea, and the intended destabilisation of Eastern Ukraine – and in both cases the troops there turned out to be Russian ones, although this has been denied by Putin, who did not say the truth to the world.

This is why Russia is now isolated more than ever. Even China did not veto the trend of a discussion in the UN Security Council on 12.4.2014.

All the efforts by Putin go in this mentioned direction. It is to be crowned by the project of the „Eurasian Union“ which is to see the light of the world in 2015. Since his article in Izvestiya some years ago, it is evident that this Eurasian Union should become a kind of counterpart to the EU. No problem with this; the EU is very much in favour of regional integration in the world. And nobody in the EU or elsewhere would have anything against the Eurasian Union. However, this Project is not about economic or political Integration only. It will never be possible as an integration in the worldwide sense, alone as the EU has been a totally voluntary integration. The same for all other integrations in the world. The Eurasian Union, however, is definitely not: its predecessor and economic centerpiece, the Eurasian Customs Union is going bonkers — even if this is not seen by the protagonists. Consisting of Russia, Belarus and Kazakhstan (all three beacons of democracy and human rights, as everybody knows), a lot of transborder operations go better with the help of corruption. I don’t want to mention the ranking in the Corruption Perception Index, as everybody also in Russia knows that there is still a lot of corruption in the administration. The customs tariffs are three times as high, on an average, as the import tariffs for new member countries: Armenia has either to raise its customs considerably, or get several hundred of exemptions, which makes a customs union ridiculous. Normally a customs union in economic history has always served to decrease customs, and not to increase! The Armenian government has been squeezed – under which circumstances ever – to welcome this and to tell its people that this would be a success. At the same time, newspapers write at the same page of many possible insolvencies of various sectors and drop-outs, which will lead to a continuation of the Armenian nightmare, the brain-drain by emigration. Every integration – see e.g. the accession of Spain, Portugal, Greece as well as Central and Eastern Europe to the EU – has led so far to a short to medium-term re-integration of former emigrants.

The biggest problem for Russia is her relations with Ukraine. Here every possible Eurasian Union member state can see at first hand, how they can be treated. No chance to hope that this can be changed: Russia has in all Eurasian structures since many years the absolute majority of votes. No way with a qualified majority, which in the EU can easily serve as an instrument of balancing the interests and of creating a compromise.

The result of the Crimea action has been to suspend Russia’s voting rights in the Council of Europe and to be subject of a negative assessment by the UN Assembly.

And nobody will invest at present in Russia, if he is mentally normal (except some big operators who are of strategic interest for Russia): The Moscow government had declared that it might confiscate foreign investmnt. This is against all rules, the rule of law, the rule of any international economy and above all the interests of Russia herself. Every small and medium enterprise will refrain from investing – and this in an era of positive globalization. Only a former KGB chief who never saw a company from inside can ride on such a wave. Russia is also dependent of its raw material and energy sales. The EU, including Germany, as main client are working since a while to diversify their purchases, a step which is getting momentum, and of developing alternative energy.

As the present macroeconomic trends indicate, Russia’s economy goes slowly but safely down, like the ruble currency, thus problemizing all foreign purchases which will be necessary also for domestic investment.

There are some people – like the author of these lines – who remember the hospitality, the fine humour, the philosophical discussions even with non-philosophers, the great nature, the food, the interesting history, the excellent education of Russian people. Their economy could become more and more efficient, corruption could go down, a numerous middle-class could emerge, Russians (all, not some) would go for holidays to the EU and worldwide, and will not flee their country, NGOs could form a vital civil society, art and music could thrive, and all problems could be discussed – why not controversially – and then solved in a free parliamentary vote. And the parliaments are correctly elected, and why not letting all parties admitted for this? Towards the outside, Russia could have excellent relations with its neighbours, with the EU (there are many years homework on what has been proposed and not done, like a free trade agreement etc.), with NATO, just to name some. In such a climate, NATO could become a historical structure – maybe with Russia as a member.

Instead of this, the former KGB chief in the Kremlin does not refrain from lying to the world, from attacking Crimea (at least. until tonight, 14.4.2014), and arresting many people who demonstrate against this in Moscow these days.

It is, simply speaking, ga-ga that at the beginning of the 21st century Russia, while all the others, or most of them, try to cooperate, falls back into the 19th century. If these ideas cannot convince the people (who should not behave like a flock of sheep), they feel a minority complex, manipulate the media and threaten other countries with tanks at their borders. They also are misled by this foreign activity from domestic and grave deficits. With this, the Eurasian Union will never function. It might be launched, but it will be a sick structure from the beginning – like many others who have been launched after 2001 in the former Soviet Union. There are brillant heads e.g. in the Eurasian Development Bank which is a kind of think-tank for regional integration and where many concepts for economic integration have been conceived. But in their concepts you do not read anything about the necessity of a free will of the member states to follow this integration. What their people have, the Russian government has not: sovereignty. The sovereignty to live and to let live. You should take it easy, Vladimir Vladimirowich. If you would, your people would also. But I have lost any hope that this is possible under your reign, although I am an eternal optimist. So drive your country to the beton wall, including following countries. Like the system of the USSR, this „Soviet 2.0“ system, although not under Communist auspices, will be rejected by a majority of People involved when they see the middle and Long-term results – first in the partner countries, then in Russia. By educated, young people who will see how dysfunctional their own system will be, also due to their Facebook and Twitter accounts and the Internet in general. Like the integration of the USSR, of Yugoslavia which both burst in bubbles. The result will always be smaller than the original. Because of this, perhaps for the sake of its own corruption?, the Moscow government will end up similarly, in the most positive way with four or five former and present European CIS countries in or near the EU, and Central Asia may later form a kind of integration themselves. It would, after all, need another and sympathetic leader in Moscow (not only to most of the Russians but also to the world) to break up this isolation and inefficiency.

New Book by Gohar Yeranyan: Acemoglu’s Model and the Reality. Dynamics of Economic and Political Power in the Former Soviet Union Countries

This study came – not planned – at the right time: when Russia tried by its policies to exercise pressure on its former parts which are now before their respective Association Agreements with the EU, as member state of the Eastern Partnership. It serves to find criteria for a dynamic development in politics and economy, based on a Master thesis at the American University of Armenia, dealing with a model of the Turkish-American economist Acemoglu, and tries answers on questions like „Under which circumstances democracy can prevail?“ in the former Soviet Union countries (FSU). Six of them have been selected for this „detective story“ among the descriptions of transition: Armenia, Belarus, Kyrgyzstan, Moldova, Russia, Ukraine. But the models of public institutions and private groups‘ behaviour are different from country to country, and the effects of transition sometimes contraproductive – be it under the „big bang“ or under „gradualism“.

Gohar Yeranyan investigates systematically the functions of the elite, the oligarchs, the interest groups, the system-immanent changes, inequality, the revolutionary potential (end the evolutionary possibilities). the wealth distribution – and the persistence of political institutions. In this context, she discusses different paths of political developments in the FSU reality, possible reasons of democratization, as well as the dynamic model by D. Acemoglu – one of the most promising economists today, as well as the role of incentives for the political and economic change in former Soviet Union countries, before giving an overview of economic development paths of the FSU countries (shock therapy versus gradualism).

She is clearly pleading for a EU-approached democracy which is more likely than any other system to keep the different interest groups balanced, and can create more GDP and popular wealth which is not only restricted to an oligarchy. This includes also that the different states should also follow an outspoken social policy. A very refreshing book (from the EU or a US perspective, for example) – and a very necessary one (from the FSU states‘ view), and a very adequate one in view of the latest discussions in the EU’s Eastern Partnership countries.

004_Pic_Gohar_YeranyanThe author, Gohar Yeranyan, lives in Yerevan/Armenia and belongs to a new generation of future Armenian leaders. She studied first for her B.A. and M.A. in philosophy and psychology at Yerevan State University, with a Master thesis on Bergson’s intuitivism, and then for another M.A. in Political Science and International Affairs at American University of Armenia (AUA). She stands for a cross-skilled approach to all scientific questions and is far away from any monolithic look about one discipline. A member of the Non-Governmental-Organization “Democracy for Development”, she has gained experience in work-life as a loan officer for a loan organisation, as a trainer for the Foundation for the Preservation of Wildlife and Cultural Assets (FPWC), giving training in leadership and intercultural communication, and in a lectorship or scientific books.

Gohar Yeranyan: Acemoglu’s Model and the Reality –
Dynamics of Economic and Political Power in the Former Soviet Union Countries
Libertas Paper 78, 48 pages, October 2013.
ISBN 978-3-937642-45-1 – e-book/PDF 4,99 EUR; e-book/Amazon Kindle version 4,99 EUR;
ISBN 978-3-937642-46-8 – Paper Edition 15,00 EUR

Orders for paper edition in any bookshop or by e-mail, for eBooks (PDF version) by e-mail: LIBERTAS – Europäisches Institut GmbH (LIBERTAS Verlag), Lindenweg 37, 72414 Rangendingen, Germany,
e-Mail: verlag@libertas-institut.com, Internet (Book Shop): http://www.libertas-institut.eu.

Orders for Amazon Kindle reader eBooks via http://www.amazon.com (or one’s country’s Amazon website). You should have an Amazon Kindle Reader.

Details are on the book flyer, which can be downloaded from LIBERTAS – European Institute under http://www.libertas-institut.com/de/PDF/Flyer_Gohar_Libpap78.pdf