Russia and its allies: the Eurasian economic and military-political integration after the crisis in Ukraine

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Russia and its allies: the Eurasian economic and military-political integration after the crisis in Ukraine

Originally appeared at A-specto, translated by Borislav exclusively for SouthFront

In the decade before the Ukrainian crisis, Russia created many strategic alliances and partnerships with the countries of the former Soviet Union and with countries that have never been under Russian influence. As partners of Moscow were affirmed China, Cuba, Iran, Hungary, Vietnam, Brazil, India, Venezuela, etc., as well as allies such as Belarus, Kazakhstan, Armenia and Syria. For most of these countries, being allies and partners with Russia provided an opportunity to counter the influence of other countries, change the geostrategic balance, get fresh investments in national economies (or as in China, investments in the Russian economy) and access to the scientific and technological potential of Russia, especially in the sphere of defense.

The economic, cultural and political relations of Russia with these and other countries grew closer, and many analysts predicted that within two decades the Russian economy will overtake Germany and will make Moscow a center of attraction for the countries of Central and Eastern Europe, the Caucasus, Central Asia and even the Middle East. The most promising project of President Putin was the Eurasian economic Union, which was to unite the post-Soviet space and thus form a new economic and geopolitical center. Excluding Lithuania, Latvia and Estonia from the potential members of the Eurasian Union, the population of other potential members would be about 280 million, with a nominal GDP about 2.7 trillion dollars. This of course would turn Russia into a natural and non-violent dominant force. According to the Stratfor agency “the focus of the Eurasian Union is on economic issues, but is also transferred on to politics and security. So for example, a single currency and administration would turn the union into something that is dominated by Russia”.

But the current global hegemon made sure this unification did not happen, at least for now. In Ukraine, which along with Russia and Kazakhstan was considered the most important part of the future Union, there was executed a coup. After that, a civil war began between the new government, nationalist groups and the population of Donbass. Especially revealing were the words of Hillary Clinton, according to which “this alliance will be not be called the USSR, it will be called an economic union, but let’s have no illusions. We know what the goal is and we must try to figure out a way to stop, or at least slow down this process.”

And the United States really took care that the process be delayed. Russia has been hit by the crisis in Ukraine, which resulted in economic sanctions and a real war. The consequences of this war is that currently more than one million Ukrainian citizens have sought refuge in the Russian Federation. In addition, lower oil prices, the responsibility for which is mainly that of US ally Saudi Arabia, contributed to the depreciation of the ruble and this created big problems for Russia. Did this affect the relations of Moscow with its allies and partners, and moreover what was the effect on the Eurasian integration process?

To answer this question, we must bear in mind that with most of these countries, the partnership was primarily in the economic sphere. According to many, since the budget of various Russian ministries is declining, and since the country has difficulties keeping unemployment low, and since it must preserve its reserves, then investment in other countries is almost impossible. But the facts speak otherwise. Over the years, many countries received favorable loans from the government’s VTB Bank. Surprisingly, loans and economic aid are still ongoing. In 2014, Russia gave Belarus a loan of $ 2 billion that was extremely needed for Minsk, especially after western banks would hardly grant anything to the “last dictator in Europe” as they call Lukashenko.

In 2015, Belarus had problems paying its debts. Russia reacted immediately and lend 860 million dollars to President Lukashenko. The trade cooperation between Minsk and Moscow also continues. Russia remains the most important export and import partner of Minsk, with 35% of the exports and 53% of the import of its ally. Moreover, Belarus continues to operate the crucial radar station of the Russian Air Space Forces. On the other hand in 2015, Lukashenko expressed his disagreement with Moscow’s plan to build an air base in Belarus. Such a base would be extremely useful to the Russian Air Force for protection against a possible conflict with NATO, but it would compromise Lukashenko’s attempt to warm up relations with the West. And Lukashenko’s efforts are visible. In 2015, Foreign Minister Vladimir Mackay was on a visit to Washington and Brussels, and in turn the West removed sanctions against some Belarusians.

According to political analyst Alexander Klaskovski, Lukashenko has always tried to maneuver between Moscow and the West as to not “go between the slaps” And there actually seemed to be a chance for a thaw in relations between Belarus and the Western powers, until NATO began to strengthen forces in the Baltics. In February 2016 it was decided that American, British, Polish, Romanian and Bulgarian soldiers will participate in the security of Lithuania, Latvia and Estonia, in rotation. In addition, the US continually increases the number of its personnel in the three Baltic states and the UK sent the frigate HMS Iron Duke to patrol the Baltic Sea until July. According to sources from the Belarusian Foreign Ministry, the strengthening of NATO forces in the neighboring Baltic republics and Poland, may force Lukashenko to agree to the deployment of the Russian Air force base in the country .

Despite some disagreements with Moscow, there are no indications that Lukashenko will change the course of Belarus. Moreover, Minsk is expected to become an important partner in the military industry of Russia – a position that belonged to Ukraine until 2013. Moreover, good relations with Russia are a prerequisite for the development of such relations with China. With Russian cooperation and mediation Lukashenko reached an agreement with China for over $ 5 billion investment in the renovation of the Belarusian industry and transforming the country into an important transport and warehousing hub for Chinese goods.

Important allies of Moscow are also the Central Asian republics which joined the Eurasian Union – Kazakhstan and Kyrgyzstan. From 2013 to date, Kazakhstan has received hundreds of millions of dollars in economic investment for infrastructure development and especially oil production. Even more help is received by Kyrgyzstan, which is a relatively poor country. In 2014 Kyrgyzstan received a $ 1 billion loan with low interest rates, which equals one-seventh of the Kyrgyz economy. However, because of economic problems, Russia failed to provide Kyrgyzstan with a loan of 1.7 billion dollars for the hydro power plant “Kambara” As per contract for the financing of the plant, Moscow has provided only $ 300 million. However, relations between the two countries remain very good, and the possibility that the energy project will be financed by Moscow remains.

Despite economic sanctions, relations with the West and the collapse of the ruble, the leaders of Kazakhstan and Kyrgyzstan continue to support the Eurasian economic integration. The difference with Belarus and Armenia, which are bonded in political-military relations with Russia, Kazakhstan and Kyrgyzstan bet on an economic integration rather than a military one. This is partly explained by the fact that Nursultan Nazarbayev was especially worried by the accession of Crimea to Russia, because Kazakhstan also has regions with significant Russian population. However on the 20th Russian-Kazakh forum in September 2015, President Nazarbayev has repeatedly stressed that Russia is one of the most important partners and allies of Kazakhstan.

Moreover, recently the two leaders seriously discussed the opportunities for cooperation in the development and Automation of Agriculture of Russia and Kazakhstan within the framework of the Eurasian economic union and its mechanisms. President Nazarbayev also tried to be a mediator in relations between Moscow and Ankara. He called on Russia and Turkey several times, to not damage the relationships that they built with years of hard work.

Currently, Russia provides economic aid in the form of loans and co-finances various projects in countries outside the Eurasian Union such as Hungary and Egypt. In 2015, Egypt signed a contract for $ 25 billion, with which it will build a nuclear power plant in Daaba. Hungary will receive ten billion dollars for the modernization and expansion of the nuclear plant “Paks”. This is an important victory for Russian diplomacy, as Hungary also received a proposal for a loan from General Electric.

Still, the economic relations with immediate neighbors and allies of the Russian Federation retain priority. Moscow provides a possible perspective and accession to the Eurasian Economic Union to other Central Asian republics. The fact that all countries of the Eurasian Union without exception supported Russia’s actions in Syria plays a positive role in relations between the Russians and their allies. In the spirit of the Russian strategic alliance with Syria, Belarusian President Lukashenko sent a special government delegation on 22 February, which assured Bashar Assad with the support and solidarity of Minsk in the struggle that Damascus wages against insurgents and terrorists. In a friendly gesture displaying the Syrian-Belarusian relations, there were a stadium and playground built, with the support of the Belarusian ambassador to Syria.

That may not seem important, but it is indicative and symbolic of the attitude of Belarus to Bashar Assad and consequently the Russian policy in the Middle East. Does all this mean that Russia, Kazakhstan, Armenia, Belarus, Kyrgyzstan and in perspective Turkmenistan and Tajikistan will continue the course towards closer Eurasian integration, remains to be seen. If Washington expected sanctions to result in a collapse of the established Union, then obviously the Obama administration lied to itself. The same thing applies to Russia’s relations with Vietnam, Iran, Cuba, Argentina and even US allies such as Hungary, Slovakia, the Czech Republic and Israel, who continue to maintain normal partnerships relations with Moscow.

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