Minsk hosted the meeting of the Supreme Eurasian Economic Council with the participation of the presidents of the three countries making part of the Customs Union. The meeting proved the well-known truth: this union has so many problems that some presidents started openly expressing their dissatisfaction. With this the Customs Union members officially concede that their integration might deepen in the form of the Eurasian Economic Union which is likely to be created very soon, on January 1, 2015.
Even before the meeting in Minsk the Belarusian President Alexander Lukashenko started to openly express his dissatisfaction. The arrest of a top manager from Uralkalii was a part of Lukashenko’s another open fronde. The problem of hydrocarbons remains essential for him. Russia keeps the oil in the list of commodities excluded from the free trade area and does not let its transmission from Kazakhstan.
For this Lukashenko has an ally, the president of Kazakhstan Nursultan Nazarbayev. He paid a special attention to the significant growth of the import ratio to Kazakhstan from the Customs Union countries during the period of 2009-12. According to him, Kazakhstan is still having difficulties in exporting its goods to the Russian and Belarusian markets that use various nontariff and technical barriers, excessive sanitarian and veterinarian norms, certification, licensing and quoting.
In general, at this stage the two countries united against Moscow. It is no wonder as the Customs Union is unbalanced in principle. Even united, Belarus and Kazakhstan have lower production volumes and other economic indices than Russia. From this point Minsk and Astana would love to have Ukraine in the Customs Union in order to neutralize Russia’s domination. Nazarbayev’s suggestion to invite Turkey to the Customs Union should be regarded from this point as well. Though, according to him, it would help stop the rumors about the renewal of the USSR under the guise of the Customs Union once and for all. The edition Kommersant wrote that, according to the Turkish Ministry of Foreign Affairs, Turkey was surprised with the declaration made by Nursultan Nazarbayev that Ankara is willing to not only develop its relations with the Customs Union but to become a part of it. Moscow is ready to accept everybody. The more the better and the candidates’ quality and seriousness will be “dealt with in the work process.” However, Astana and Minsk have a different concern. Kyrgyzstan and Tajikistan will require the financial assistance due to their economic weakness. Belarus and Kazakhstan do not accept this option. Nazarbayev suggested taking them to the Customs Union as observers and inviting Armenia as a full-fledged member.
It is no coincidence that the President of Kyrgyzstan Almazbek Atambayev blatantly refused to come to Minsk. His country was represented by the First Deputy Prime Minister Dzhoomart Otorbayev. We should remark that Kyrgyzstan did not even send to Minsk its prime minister but a lower rank official. It demonstrates a cooling in relations.
Officially Bishkek is dissatisfied with the fact that Minsk does not give away the former president Kurmanbek Bakiyev.
However, it is not the only problem. Just before the summit the Foreign Ministry of Kyrgyzstan issued a declaration concerning the arrest of Kyrgyz migrants in Moscow and their deportation. Bishkek is dissatisfied with the “biased attitude” from the Russian migration services. The Kyrgyz government did not expect that the citizens of the country who declared its intention to enter the Customs Union would be treated in a similar way, whereas other countries (Ukraine and Moldova) have to be pushed to do so. The showdowns between Moscow and Bishkek might make Kyrgyzstan slow down or even cancel its decision about entering the Customs Union.
Lukashenko is keeping the idea of becoming the main integrator in the Customs Union and its neighboring countries. As it used to be in the Soviet time he likes so much, the Palace of Independence, which hosted the summit, was constructed and opened in the emergency mode.
The main question of the meeting was the discussion of the project agreement of the Eurasian Economic Union. During the session Lukashenko clearly declared that the cooperation has to be “without exceptions.” “Say, if the Kazakhs want to pump their oil to Belarus using common pipes, the access should be equal. If Kazakhstan wants to export its products to Belarus and Europe using Kazakh, Russian, and Belarusian railways, the conditions should be the same. However, now we have a whole bunch of exceptions and you understand it perfectly well.”
It is important for Belarus to buy the energy carriers for inner Russian prices and not to pay any oil duties to the Russian budget as it is happening now. Besides, this norm has to be cancelled by January 1, 2014 despite that the Eurasian Economic Union is supposed to be created at the beginning of 2015. “Otherwise, we will not be able to stay in the Customs Union,” Lukashenko nearly threatened the Russian authorities. Nursultan Nazarbayev’s declaration was quite similar.
Having faced the united front of Astana and Minsk, Moscow had to agree at least in words.
Putin hurried to calm down the allies. He declared at the press conference: “We realize that it is important for our partners to cross out the exclusions related to the oil, oil products, etc. We are ready. It will mean budget losses for us, but we are ready to do so.” However, Putin emphasized that some time is needed for this. “We are counting on our partners to make advances removing the exceptions they consider to be important... Equal conditions have to be created.” As Putin said, this is a great job and it has to be bilateral. There should be a compromise.
It is quite clear what it implies. In particular, Minsk will have to enable the Russian business to participate in privatization of Belarusian enterprises. Lukashenko does not accept it. He will also have to delegate powers to intergovernmental bodies. Though he generously said that “the sovereignty is not an icon,” he will put if off as long as possible.
Certainly, he can say it but it is difficult to imagine that Lukashenko who strictly controls the government and the National Bank will agree to pursue the unified macroeconomic policy.
Nazarbayev does not have fewer problems. In Kazakhstan the dissatisfaction with the Customs Union is growing. If the exclusions are removed too slowly, these moods will reinforce. Besides, in Astana there is a powerful pro-China faction. So far Nazarbayev is firmly holding everything in his hands but the time is against him. Nobody can say which faction will come to power after him. It is obvious that the speeded integration initiated by Moscow to achieve geopolitical profits is facing the significant objective difficulties. Their number is going to grow. If an economic union is based only on political reasons, it will be no good. Such unions have never lasted for a long time.