Five Questions on Russian-Led Regional Integration and the Eurasian Economic Union

Stephan Haggard: American and European scholars have not paid much attention to the EAEU, believing that its integration ambitions are necessarily limited, in part by fears of Russian dominance. Can you briefly outline its origins, accomplishments, and membership?

Alexander Libman: The Eurasian Economic Union (EAEU) was created in 2015, but its direct predecessor—the Customs Union—was set up in 2010. It has five members: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. The first attempts by these countries to set up a regional integration project can be traced back to early 1990s, when integration emerged as a tool to reduce tensions associated with the collapse of the Soviet Union. However, all regional organizations before 2010 in post-Soviet Eurasia suffered from major implementation gaps and failed to produce any tangible results. This was also the reason why many in the United States and the European Union (EU) were skeptical about the EAEU—they generally perceived post-Soviet Eurasia as a “disappearing reality.” 

The EAEU, however, performed much better than its predecessors. It is a functioning customs union –albeit with many exceptions to the common customs tariff—and allows for the free movement of capital and labor. It has some elements of supranationality. For example, in trade policy, the organization’s decisions immediately become part of member states’ laws. 

The 2015 EAEU treaty envisions that members states should sign separate treaties on integration in sensitive areas like energy markets and financial services. The specific content of the treaties had to be negotiated by member states. In some cases—such as trade in electricity or medical products—they managed to successfully conclude these negotiations, but only because the final treaties envisioned relatively modest integration goals and substantial autonomy for member states. Some treaties, like for financial markets, have never been signed, and are extremely unlikely to materialize in the future. Currently, there is discussion about a common industrial policy for the EAEU, but there is little progress on this topic so far. 

Stephan Haggard: There seem to be two competing views on the EAEU: one treats it as a standard regional trade agreement, another considers it a structure to protect authoritarian regimes in the region and further Russian imperialist interests. How do you perceive this debate? Is there an internal conflict within the EAEU between those who want it to focus on more narrow economic goals than wider political ones?

Alexander Libman: This is indeed one of the most challenging aspects of studying the EAEU. If one looks at the official mandate, the policies it implements, the structure of its governance body—the Eurasian Economic Commission—it appears to be a standard regional economic organization. 

Some of its members, especially Kazakhstan, repeatedly emphasize that the EAEU is only an economic organization, without any political agenda. At the same time, Russia clearly sees the EAEU as a tool to demarcate of its sphere of influence in Eurasia, or at least it did so until recently—since it embarked on the full-scale invasion of Ukraine, Russian leadership has opted for using military tools rather than regional organizations to indicate the boundaries of its sphere of dominance. This creates a contradiction; the reasons why Russia promotes membership in the EAEU or why some countries join or refuse to join have less to do with what it actually does than its symbolic geopolitical role.

Stephan Haggard: How did the war in Ukraine change the EAEU? Can the organization survive with its main member being subject to Western sanctions and its smaller members being increasingly concerned about the unpredictability of Putin’s regime?

Alexander Libman: As of now, the EAEU muddles through. The organization introduced relatively few changes to its agenda after the full-scale war started. The unpredictability of Putin’s regime makes smaller countries pursue a double strategy: they try to avoid alienating Russia while at the same time trying to reduce their dependence. Practically, it stagnates the regional integration project. Countries do not leave the EAEU because Russia could react on it in a hostile way, but they do not support further integration that might cut off other opportunities for more intensive cooperation with China, Turkey, or Europe. In the early 2010s, the EAEU occupied a prominent place in Russian political rhetoric, but over time, Russia has gradually lost interest in the project. 

At the same time, however, the war has given the EAEU a new purpose. Relatively open borders within the EAEU made countries like Kyrgyzstan, Kazakhstan, and Armenia important conduits for the import of Western goods and technologies to Russia in defiance of sanctions. This is not surprising. The Southern African Customs Union played a similar role for South Africa during apartheid. In addition, Russian citizens leaving the country for political reasons can enter EAEU countries much more easily than other states. The benefits from both sanctions evasion and the flow of Russian emigrants are highly attractive for EAEU countries, despite the risk of secondary sanctions from the United States. 

The Russian regime benefits from the EAEU countries being a safe haven for Russian emigrants as well. Currently, the regime is content to push discontent citizens out of the country rather than prosecute them in Russia. People who otherwise could have started domestic protests end up in neighboring states. That situation may change if Russia declares another wave of mass mobilization and needs potential recruits to stay in the country. Russia has already taken legal precautions for this scenario, which essentially block draftees from leaving the country.

The EAEU has delivered significant economic benefits for Russia after 2022. Germany was once one of Russia’s major trading partners, but has massively decreased direct exports to the country following the full-scale invasion of Ukraine and resulting sanctions. But since then, exports to Kazakhstan, Kyrgyzstan, and Armenia have increased by more than four times.

Stephan Haggard: The EAEU is frequently seen a Russia-centric organization. What does that mean for other great powers in Eurasia, particularly China?

Alexander Libman: Economically, China is very important for Central Asian members of the EAEU: Kazakhstan and Kyrgyzstan. These countries want to trade with China. For example, Kyrgyzstan has served as a gateway for Chinese consumer goods for all of Central Asia. But the need to comply with the EAEU’s common tariff limits trade flows from China, which puts Central Asian countries in a difficult position. 

Politically, many observers speculate about an imminent confrontation between Russia and China, since both aspire to take control over Central Asia. In practice, however, this confrontation is unlikely. China and Russia share a common vision for Central Asia. Both are concerned about the spread of Islamism, both are adamant in making sure that the United States and other Western countries are kept outside the region, and both see Central Asian authoritarian regimes as the first-best guarantee of regional stability. Russia’s and China’s common vision allows them to avoid conflict—although Central Asian regimes do not necessarily share their objectives. Kazakhstan and Uzbekistan show strong interest in diversifying their foreign policy ties and having good relations with the West. 

Stephan Haggard: What can we learn from the case of the EAEU for the study of authoritarian regional organizations? In your view, does it enhance the political resilience of autocrats in the region? 

Alexander Libman: The EAEU illustrates perfectly the complexity of authoritarian regionalism. Students of authoritarian organizations in the past either ignored the nature of political regimes of their members—treating them as normal regional organizations—or focused exclusively on the contribution of these organizations to the stabilization of authoritarian regimes and promotion of autocracy abroad. The EAEU shows that both perspectives could be relevant to understand authoritarian regionalism. 

Furthermore, the EAEU is a very interesting case for studying the limits of authoritarian regionalism. There is a widespread argument in the literature that autocracies are unable to create functioning regional organizations due to the credible commitments problem and fear of excessive dependence on other autocracies. The EAEU contradicts this argument somewhat. However, it is important to note that there are clear limits for further advancement of regionalism. This includes an absolute rejection of a common political agenda on the part of the smaller members states. Autocracies can cooperate only if the level of their dependence on each other remains relatively limited, particularly in the context of the risks associated with integration to an authoritarian great power. 

Alexander Libman is a professor of Russian and East European Politics at the Freie Universität Berlin.

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