Belarus, Kazakhstan and Russia introduced a free trade area encompassing the 3 nations in 2010, the so-called 'Customs Union'.
Historically a merger of customs control and tariffs is a precursor to nation building, so it is perhaps of little surprise, that following the Customs Union a more ambitious program was heralded by Putin.
The Customs Union is the foundation of the Eurasian Economic Union which is the total amalgamation of the Belarus, Kazakh and Russian economies with a single currency; in effect a de facto Russo version of the European Union.
History usually has the answers: The Zollverein, or German Customs Union, of 1818 was the original union that linked economic ties between the various German states centred on Prussia.
It was the precursor to Bismarck's founding of the German Empire of 1871.
There were 3 principal goals behind Prussia's Zollverein: a political tool to eliminate the influence of a large competitor (Austria); as a way to improve the economies of the various Principalities; and to strengthen Prussia against potential outside military (French) aggression while reducing the economic independence of smaller states (I.
e.
control your neighbours).
At the same time the Union created a larger market for Prussian products and endorsed a commercial confederacy under financially viable economic constraints.
While the Union opened the markets between and among its' member states, it continued to maintain the restrictive practices with foreigners.
Does this sound familiar? Many Russia watchers just see the Eurasian Economic Union as a counter to the European Union and the United States.
One should also see it in the context of Chinese and Russian rivalry in resource-rich Central Asia.
The Eurasian Economic Union was created to counter Russian political and security concerns, about Chinese expansion in to Central Asia.
Few will argue that the European Union or the United States have any immediate military designs on Russia or any of its territories.
If the Prussian model "Zollverein" is used, China makes a useful substitute for Austria and France.
China is quite candid about its competition with its northern neighbour.
Wikileaks published the Chinese Ambassador's comments to his United States Kazakh-counterpart: "I will have to cautiously balance between our growing cooperation in the region and Russian interests.
However, we cannot harm our interests because of Russia.
In Sino-Russian relations in Central Asia, there is both cooperation and competition.
Our policy is to co-exist here, and we need to maintain a dialogue.
" Tajikistan and Kyrgyzstan, the weakest of the central Asian states, recently confirmed their intention to join the Eurasian Economic Union.
For both, China's expansion plans and investment projects, and Russia's Eurasian Economic Union, created a conundrum.
The region wanted both China and Russia to develop as trade partners, but to remain as individual nation-states; neither could afford to become overly dependent on either.
Long term, independence looks improbable.
Poor countries, dependent on Russian energy and remittances from their Diasporas in Russia, caught between the proverbial rock and a hard place; both are reliant on Chinese revenues.
Kyrgyzstan employs tens of thousands on the re-export of its Chinese imports.
Trade markets generated about a third of the country's GDP, now already in decline following the launch of the Customs Union.
As part of the 'game,' both suffered the strategic energy weapon, with recent Russian fuel price increases.
Following this, Almazbek Atambaev, the Kyrgyz Prime Minister visited Moscow to secure gas supplies and subsequently agreed to Kyrgyz membership of the Union.
Kyrgyzstan and Tajikistan had looked to China to overhaul their decrepit Soviet infrastructure and revitalize their stagnant economies.
In 2009, China offered $10 billion in loans to the region "to shore up the struggling economies" following the global meltdown.
Trade between China and Central Asia grew from $0.
5 billion in 1992 to $25.
9 billion in 2009.
Of Russian concern will be the quote credited to General Liu Yazhou of the People's Liberation Army, saying that Central Asia is "The thickest piece of cake given to the modern Chinese by the heavens".
Opposing Russian objectives, China sees the region as an opportunity for energy security, expansion of trade, and maintenance of its' territorial integrity.
Russia needs to lock the Central Asian states into the nascent Eurasian Economic Union and counter the Chinese activity, in what Russia sees as its' zone of "privileged interests.
" What China does to oppose the Russian-led Customs Union agenda in Central Asia, remains to be seen.
Historically a merger of customs control and tariffs is a precursor to nation building, so it is perhaps of little surprise, that following the Customs Union a more ambitious program was heralded by Putin.
The Customs Union is the foundation of the Eurasian Economic Union which is the total amalgamation of the Belarus, Kazakh and Russian economies with a single currency; in effect a de facto Russo version of the European Union.
History usually has the answers: The Zollverein, or German Customs Union, of 1818 was the original union that linked economic ties between the various German states centred on Prussia.
It was the precursor to Bismarck's founding of the German Empire of 1871.
There were 3 principal goals behind Prussia's Zollverein: a political tool to eliminate the influence of a large competitor (Austria); as a way to improve the economies of the various Principalities; and to strengthen Prussia against potential outside military (French) aggression while reducing the economic independence of smaller states (I.
e.
control your neighbours).
At the same time the Union created a larger market for Prussian products and endorsed a commercial confederacy under financially viable economic constraints.
While the Union opened the markets between and among its' member states, it continued to maintain the restrictive practices with foreigners.
Does this sound familiar? Many Russia watchers just see the Eurasian Economic Union as a counter to the European Union and the United States.
One should also see it in the context of Chinese and Russian rivalry in resource-rich Central Asia.
The Eurasian Economic Union was created to counter Russian political and security concerns, about Chinese expansion in to Central Asia.
Few will argue that the European Union or the United States have any immediate military designs on Russia or any of its territories.
If the Prussian model "Zollverein" is used, China makes a useful substitute for Austria and France.
China is quite candid about its competition with its northern neighbour.
Wikileaks published the Chinese Ambassador's comments to his United States Kazakh-counterpart: "I will have to cautiously balance between our growing cooperation in the region and Russian interests.
However, we cannot harm our interests because of Russia.
In Sino-Russian relations in Central Asia, there is both cooperation and competition.
Our policy is to co-exist here, and we need to maintain a dialogue.
" Tajikistan and Kyrgyzstan, the weakest of the central Asian states, recently confirmed their intention to join the Eurasian Economic Union.
For both, China's expansion plans and investment projects, and Russia's Eurasian Economic Union, created a conundrum.
The region wanted both China and Russia to develop as trade partners, but to remain as individual nation-states; neither could afford to become overly dependent on either.
Long term, independence looks improbable.
Poor countries, dependent on Russian energy and remittances from their Diasporas in Russia, caught between the proverbial rock and a hard place; both are reliant on Chinese revenues.
Kyrgyzstan employs tens of thousands on the re-export of its Chinese imports.
Trade markets generated about a third of the country's GDP, now already in decline following the launch of the Customs Union.
As part of the 'game,' both suffered the strategic energy weapon, with recent Russian fuel price increases.
Following this, Almazbek Atambaev, the Kyrgyz Prime Minister visited Moscow to secure gas supplies and subsequently agreed to Kyrgyz membership of the Union.
Kyrgyzstan and Tajikistan had looked to China to overhaul their decrepit Soviet infrastructure and revitalize their stagnant economies.
In 2009, China offered $10 billion in loans to the region "to shore up the struggling economies" following the global meltdown.
Trade between China and Central Asia grew from $0.
5 billion in 1992 to $25.
9 billion in 2009.
Of Russian concern will be the quote credited to General Liu Yazhou of the People's Liberation Army, saying that Central Asia is "The thickest piece of cake given to the modern Chinese by the heavens".
Opposing Russian objectives, China sees the region as an opportunity for energy security, expansion of trade, and maintenance of its' territorial integrity.
Russia needs to lock the Central Asian states into the nascent Eurasian Economic Union and counter the Chinese activity, in what Russia sees as its' zone of "privileged interests.
" What China does to oppose the Russian-led Customs Union agenda in Central Asia, remains to be seen.
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