• 05
  • OCT
  • 2011

Russia seeks to forge new trade block

Russia seeks to forge new trade block

Russia is calling for a 'Eurasian Union' to reassemble former Soviet states into a single economic entity.

 

Such a block would increase trade between a vast expanse of land - from the Arctic to Astana and from Poland to the Pacific.

 

The main advantages would be to ease the transit of energy through the network of pipelines that still weave through ex-Soviet states. The parallel here with Western Europe's Coal and Steel Community, which proceeded the Economic Community in the 1950s is clear.

 

However, it is more likely that Moscow's grand project will remain a pipedream. After centuries of imperialism, most of Russia's neighbours suspect its motives. The Baltic states rapidly aligned with the EU and NATO soon after independence, the central Asian republics pursued their own direction and Belarus and the Ukraine seem occupied with their own internal troubles.

 

Even though the resurrection of the Warsaw Pact seems improbable, the moves signify a change in the balance of power in international relations.

 

The world is seeing the stock for European values – free markets and universal norms of rights and responsibilities of governments – ebbing since the global financial crisis flayed Western economies. Only today official figures for the UK's annual GDP growth have been downgraded to 0.1%.

 

Eastern Europe had been seen as a significant area of political risk. The controls against political interference, especially in the form of state corruption, did not create the environment for transparent business practices upon which the West is based.

 

The structures and standards upon which Western businesses rely may lose traction overseas as the global order realigns around a separate set of norms. The rising tide of nationalism – which has historically coincided with periods of economic austerity – may make conducting business in an increasingly fragmented world harder still.

Comments

Add a comment
John via LinkedIn

John via LinkedIn

It is probably the way to go BUT what lessons can be learnt from the EUROZONE crisis? Perhaps Africa could begin to upgrade its regional economic groupings to the EUROZONE level. 

Hasan Ahmed via LinkedIn

Hasan Ahmed via LinkedIn

as the article states...it will be a pipedream, and rational economics would advise that all those periphery states of the post USSR should ally themselves with the likes of India and China rather than Russia. not so much because of the past bad blood, but the existing "poor bloodflow" in Russia...the evil of the post KGB mafia which has now become an organised institution. China's manufacturing and India's service industries will be a better round peg in a round hole for the previous territories....

Dr John Andrew Siame PhD via LinkedIn

Dr John Andrew Siame PhD via LinkedIn

It is probably the way to go BUT what lessons can be learnt from the EUROZONE crisis? Perhaps Africa could begin to upgrade its regional economic groupings to the EUROZONE level.

Yury Golovkov via LinkedIn

Yury Golovkov via LinkedIn

I am sure that this will be one of the main priorities for Mr. Vladimir Putin and his new team as of 2012.

The Economist

The Economist

It is interesting that this is Putin's first foreign-policy proclamation since announcing that he will return as president. Although it indicates a possible shift in Russia's priorities, mere aspiration will not become reality given the limitations of Russia's attractiveness to other countries and that most former Soviet countries will be suspicious of encroachments on their sovereignty. 

Timo via LinkedIn

Timo via LinkedIn

That all would only deepen the problems of the former Soviet states. As soon as economy gets back on track in western world, the pull towards west will surely prevail in all countrires surrounding Russia. Russian attitudes and will to control, to manage them essential work positions, who get them, with what kind of mindsets, and to manage economical resources, to divide et impera countries from developing and cooperating, being more prosperous than Russia, it is just disaster from them countries if not seeking to independently being part of the rest of the world, and doing only business with Russia with ways and means that bring equality to the table. 
Russia is trying to benefit from old culture ties, and the problems of the west at the moment, but still they have nothing really, and the developments are yet to happen in Russia itself outside of few tiny metropolitan areas, the rest is still like in time machine.
The former Soviet countries have plenty of examples of how things can be and develop well when not taking any attitudes from Russia and not giving in to Russias economical pressures and desires to walk over independent countries processes and policies like in Nord Stream project, just using political power and huge pressure to get its will thru and papers speeded up through required analysis phases. 
There still is that Russia is eager to use military power in between the lines as it suggests it would be listened to. Rarely there is pure and open model deals that would truly honor independence of "voluntary" partner countries. CSTO countries have no choice, and outside of it Russia benefits from being one hub country that knows about all them around it, and preventing them from understanding to cooperate together more and better. Also economical chances to do so, and the political will is actively played down.
So all in all, there is so far no other reason for ex Soviet countries to be in cooperation any more, but Russia affected politicians, its promoted selections from each country, and that kind of infiltration, and control over the news media via perhaps Sanoma Corporation (based in Finland), to manage that all.
Russia eagerly says this would be natural, and the way of life, but rather the populations from the neighbouring countries would do like the rest in the free world, make up their own choices and compete with the rest of the world, instead of under some Russian oligarchs "knowing what is enough and good enough" for its surrounding areas people and their development. 

Richard Batterbee via LinkedIn

Richard Batterbee via LinkedIn

I do not believe a "Eurasian" trade block would be beneficial especially as the trade block that we have for Europe does not work that well, with mindless red tape of legislation.

Russia in fact should make it easier for foriegn companies to set up so trading is more fluid and that employment for Russian Nationals is encouraged. The one draw back is that with the media coverage of BP & TNK may have an adverse effect on business decisions.

The Russian market is ripe for organizations to enter into and should be seriously considered, I for one have decided that in 2012 I will start to learn Russian as a second language.

Submit a comment

avatar