|CIS WILL BENEFIT FROM REASONABLE
MOSCOW. (Professor Vyacheslav Vashanov for RIA Novosti)
The economic and political interests of the national elite groups which
have developed in the post-Soviet states in the 15 years since the
dissolution of the Soviet Union, frequently clash with those of Russia.
Members of the Commonwealth of Independent States (CIS) are revising their
trade and economic priorities in favor of non-CIS countries, thus cutting
inter-CIS trade. Russia has increased trade with partners outside the CIS
by 150% and only by 100% with member states in the past few years.
Overall, Russia’s trade with the CIS went down from 18.2% to 15.2% of
According to customs data, Russia’s foreign trade totaled $339.8 billion
in 2005, including $288.2 billion with non-CIS countries (a growth of
37.2%) and $51.6 billion with the member states (+9.3%).
Border trade accounts for a substantial share of overall trade in
industrialized countries. The United States’ northern neighbor, Canada,
accounts for 19% of its foreign trade, and its southern neighbor, Mexico,
Russia’s biggest CIS neighbors – Kazakhstan, Belarus and Ukraine –
account for 2.8%, 4.6% and 5.9% of its foreign trade, respectively.
The reason for redirecting economic ties to the West, China and other
non-CIS countries is simple. American companies have invested about $6
billion in the economy of Kazakhstan, while Russia has provided only
$105.7 million, or nearly 60 times less. In the next 10 years, the U.S.
intends to invest about $200 billion in Kazakhstan, including about 80% of
the sum total in oil and gas production.
In this way other countries are taking over Russia’s potential place in
the oil and gas sector of Kazakhstan. Pro-Western lobbies supported by
international economic and financial unions and institutions are very
active in many CIS states. Logically, they are lobbying for the interests
of Western companies to the detriment of Russian ones.
The future integration of the CIS states will be greatly influenced by
their accession to the World Trade Organization (WTO). As of now, Armenia,
Georgia, Moldova and Kyrgyzstan are the only CIS members in the WTO. The
other CIS states (with the exception of Turkmenistan and Tajikistan) have
filed accession requests and are holding negotiations.
WTO membership can facilitate national producers’ entry into Western
markets. But the CIS states will have to take measures to improve the
quality of their output and make it more competitive, as well as to
In accordance with the principle of compliance with the provisions of the
agreements that form the legal foundation of the WTO, aspiring countries
must adjust their legislation to WTO norms and rules, especially as
regards the regulation of international trade and the position of imports
on the national markets. In other words, accession to the WTO calls for
overhauling national legislation and the terms of international treaties
within the CIS.
The member states will have to specify the principles of their foreign
trade because they are closely connected in many areas
(most-favored-nation status, withdrawals, the terms of mutual control,
introduction of obligatory dispute-settlement procedures, responsibility
for compliance with contractual obligations, pricing policy, and
There are some factors that can promote the integration of the CIS,
including the experience of coexistence within common borders, the
intermingling of cultures, as well as specialized monopolies whose output
is in high demand in the CIS, primarily fuel and energy ones. Other vital
factors are transport, mutual trade, the remaining production ties, and
The benefits of membership depend on a balanced regard for the interests
of member states. The interests of Armenia, Belarus, Georgia, Kyrgyzstan,
Moldova and Tajikistan lie in the fuel and energy sector, agribusiness and
defense industries. Azerbaijan, Kazakhstan, Russia, Turkmenistan and
Uzbekistan mostly focus on the creation of a transport infrastructure,
notably for the delivery of energy, as well as the development of Caspian
The countries that depend on the fuel and energy sector should develop
relations with the oil, gas and electricity transit states of the CIS.
They should draw on global experience to coordinate preferential prices
for energy and transit.
On the whole, there are more uniting than dividing factors in the CIS.
Russia, which is crucial for the effective development of the CIS, should
serve as an example through sustainable economic growth, thus creating a
socially oriented state with high living standards. It should probably use
economic concessions more widely with a view to subsequent geopolitical
However, Russia seems to be more charitable with regard to non-CIS
countries. It has written off the debts of Syria ($10 billion), Algeria
($4.7 billion) and Iraq ($10 billion), and is prepared to “forgive”
Afghanistan a $10 billion debt. But its debt policy towards the CIS states
is changing from charitable to pragmatic.
The United Kingdom continues to work energetically with the former members
of the British Empire. It has a Foreign and Commonwealth Office that
handles economic and political relations with the former colonies and
dominions. The national budget has a separate item for financial
assistance to the former members of the British Commonwealth.
Russia needs the CIS geopolitically, politically, economically and
socially, because it will always have special relations with the member
states. These relations should rest on the principles of mutual benefit
and reasonable financial assistance. If Russia uses its ability to promote
effective integration wisely, the CIS will not just survive its current
tribulations, but will also develop as fast as other advanced global
Professor Vyacheslav Vashanov is head of the Center of the Economy of the
Commonwealth of Independent States.
The opinions expressed in this article are those of the author and may not
necessarily represent the opinions of the editorial board. -0-