For over 15 years, the people of the former Soviet Union have been desperately trying to choose between two formulas of existence: “Separately impossible. Together” and “Separately. Together impossible.” When the dragged-out agony of the Soviet empire ended in 1991, it seemed that the question was finally solved and the solution was “Separately. Together impossible.”

Soon the issue was again on the agenda; the euphoria of achieving sovereignty inside the post-Soviet space proved to be short-lived. It became necessary for the newly independent states to pool their efforts to reinforce their independence, especially after losing their traditional ties which bound them. A tendency for reintegration began to develop, and by the mid-1990s it seemed that the formula “Separately impossible. Together” would soon prevail. During this period, the most important initiatives were undertaken within the format of the Commonwealth of Independent States: the Economic Union Treaty (1993), the Agreement on the Free Trade Zone (1994), the Agreement on the Union for Financial Transactions (1994), the Agreement on the Customs Union of Russia, Belarus, Kazakhstan and Kyrgyzstan (1995), and the Treaty on the Formation of a Community of Russia and Belarus (1996).

The CIS filled the vacuum that had emerged after the Soviet Union’s collapse, and successfully offered a ‘civilized divorce.’ Yet, it proved unable to become an efficacious regional association of countries. In the economic sphere, it did not extend beyond the regime of free trade, and then only with certain exemptions. Nor did the Commonwealth play a significant role in solving the political problems between its member states. The inveterate conflicts in Moldova’s Dniester region, Georgia’s South Ossetia and Abkhazia, and the Armenian-populated Azerbaijani enclave of Nagorno-Karabakh did not disappear. Moreover, new conflicts continued to flare up. Russia and Ukraine quarreled over Tuzla, an island or sand-spit few people had previously heard of; Russian-Belarusian relations hit a deep crisis which required public declarations of their positions; Georgia made known its choice in favor of the European Union and NATO; Ukraine and Moldova followed suit.

Do all of these events mean the CIS is nearing its end? Or that Russia has suffered a geopolitical defeat as a result of the malicious techniques of the Western secret services? Does it signify the victory of the formula “Separately. Together impossible?” Not in the least. It just means that the epoch of political pragmatism, ushered in by the change of the political elites in the post-Soviet space, has taken firm root.

EVOLUTION OF PERCEPTION

In the mid-1990s, I commented on many occasions that the CIS was to a great degree the personal creation of its founders and that it was unlikely to last beyond the end of their political careers. Quoting oneself may seem immodest, but this is what I wrote in 1997: “The CIS does not have a solid institutional foundation and largely relies on personal contacts and trust relationships between the leaders of the member countries, as many of them have known each other since the times of “joint work” in Soviet institutions. Most leaders in the CIS share an integration-oriented mentality and political culture. They continue speaking the same language – both in the literal and figurative sense. They think along the same lines and many things in the Commonwealth have come into being due to their ability to tap solutions to knotty political issues inside this selective club.

“What is more, the first generation of presidents of the Commonwealth countries is aware of their responsibility for the unavoidable yet painful decision to disband the Soviet Union and is trying to compensate for the hardships that this decision brought to their peoples. This is probably why they are pushing for a fast – but chaotic – integration, without assessing its economic aftermath.

“But the Commonwealth will inevitably get a different appearance as new state leaders come to power. These people will be free from the burden of responsibility for the past and they will treat integration issues the way they should be treated – by assessing all the pros and cons and only taking steps that meet the economic and political interests of their nations.”

This forecast has materialized. New people are coming to power in the CIS countries as the Commonwealth is changing right in front of our eyes. Relations between the member states are becoming different, too.

Russia has been the trailblazer in this process. In the 1990s, Moscow’s policy toward the former Soviet republics was devoid of pragmatism. It was highly contradictory, even chaotic, as it bolted from one extremity to another.

Occasionally, Moscow would look at the CIS countries as quasistates, as former republics or even former colonies which were economically dependent on Russia, especially when it came to energy resources. Adhering to the popular thesis “Who will they turn to, if not us?” inflicted a serious blow on Russia’s political interests in the post-Soviet space in the early 1990s. Russian politicians were terribly slow in realizing that the CIS countries had acquired genuine independence in every sense of the word. They had designed alternative development strategies and secured alternative allies – the components of a multivector diplomacy.

The other extremity of Russia’s position went something like this: “The people in the CIS countries are also our people, and we must help them selflessly because economic computations are out of place when it comes to fraternal relations.” This line of thought opened up broad opportunities for our partners to run up debts, specifically debts for energy supplies.

Moscow’s non-systemic policy toward the post-Soviet states was linked to a hidden conflict between Russia’s long-term strategic interests which demanded that the CIS be kept within the sphere of its influence, and its economic capabilities at that time, which made a costly foreign policy impossible.

Nonetheless, starting in 2000, Russia began to show a pragmatic approach to the CIS countries. It began to treat them as strategic and preferential partners, while at the same time building relations on the basis of precise economic calculations. Limited resources forced the Kremlin to weigh the potential effects of integration-oriented measures and bilateral cooperation against the price it had to pay for them.

That is how Russia has developed an understanding that the sooner it drops the early post-Soviet conception of the ‘Near Abroad,’ and the sooner it gets accustomed to the fact that the Commonwealth consists of truly ‘foreign countries,’ the better it would be for everyone. Russia has realized the importance of having distinctive relations with the CIS countries, while at the same time building those relations on the basis of generally accepted international norms.

A CRASH AFTER TAKEOFF?

There is no doubt that integration with the CIS countries also meets Russia’s strategic and short-term interests. However, “integration at any rate” is out of the question. Russia must develop integral ties that would foster democratic and market changes both in the CIS and Russia, facilitate its economic growth, create new jobs and provide integration into the world community.

 This pragmatic approach has been underlying Russia’s policy toward the Commonwealth until very recently and it has proven productive: Russia succeeded in finding solutions to many chronic problems in its bilateral relations, such as reorganizing Ukrainian and Moldovan debts for natural gas supplies. Plans were launched to establish a Russian-Ukrainian gas consortium with a provision that leading European companies may join it at a later date. Russia and Ukraine completed the delimitation of their territories and found a denouement to the border complications in the Sea of Azov and the Strait of Kerch. Tremendous effort was invested in helping Belarus accept the Russian ruble as a common legal tender. The problem of Armenian and Tajikistani debts to Russia was resolved and a great legislative breakthrough was completed with regard to the Caspian Sea issue: the agreements that Russia signed with Kazakhstan and Azerbaijan made it possible to develop mineral deposits on the Caspian shelf and resolve the Caspian Sea knot by dividing the seabed and declaring the body of water common territory. A long-term agreement was signed on the purchase of natural gas in Turkmenistan. The rest of the list is long enough, too.

The achievements in the multilateral format look equally impressive. In 2000, Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan created the Eurasian Economic Community (EurAsEC), an organization based on Europe’s integration experience and aimed at forming a common economic area in the future. Ukraine, Moldova, and Armenia acquired the status of observers there. With great speed, Russia, Ukraine, Belarus and Kazakhstan drafted, signed and ratified an agreement on the Common Economic Area (CEA) and began working on the documents to ensure its implementation. The presidents of Russia, Kazakhstan, Uzbekistan and Turkmenistan signed a declaration on strategic partnership in natural gas. Several CIS countries created the Collective Security Treaty Organization. The CIS Antiterrorist Center began active operations. And again, the list continues.

Suddenly, however, these and many other achievements seemed to be nullified as election campaigns in Georgia and Ukraine produced unexpected results, while Russian-Moldovan relations started to deteriorate on the eve of their elections. Has the Russian policy of the past three to four years begun to falter? Is Russia’s position weakening in the post-Soviet space? To get answers to these questions, let us look closer at the very nature of equitable relations that presuppose the presence of at least two sides defending their interests. Pragmatism on the Russian side presumes pragmatism on the side of its partners, whose policies may sometimes be viewed as anti-Russian.

Moscow is being put to a test – a test for commitment to pragmatic policies – by the new pragmatism of our old partners, the inevitable change of elites in some CIS countries, and a controllable or spontaneous accession of power by new political forces and figures. Hopefully, Russia will successfully pass the test.

MOVING FROM THE VIRTUAL TO THE REAL

Russia’s partners can make, and have already made, choices that run counter to its expectations. This is their choice, however, and from now on such choices will be based on pragmatism. Pragmatism opens the doors to seemingly unnatural alliances among, for example, the Georgian and Ukrainian proponents of a market economy and Moldovan Communists. In this situation, it is important that Russia resist the temptation of replacing the pragmatic approach toward its neighbors that has proven so fruitful in the past few years with “geopolitical concepts” of some kind. Today, Russia and all other CIS countries steer their foreign policies exclusively in compliance with national interests, and keep them poised using the art of pragmatic policy-making. It is from this position that one must analyze the situation in the post-Soviet territory.

Despite all the efforts to reform the CIS, it remains a rather virtual integrative amalgamation with a complex and poorly governable bureaucratic structure. Today, the member states are discussing the possibility of yet another reform, but they still leave major questions unanswered, namely: What is the objective of integrating in the format of the CIS? What are they creating? How much will it cost? What will be the main phases of this process?

Initially, the documents signed in 1992 and 1993 – most importantly, the Economic Union Treaty – suggested that the CIS would develop along the patterns of a normal regional union and would have:

– a free trade zone;
– a customs union;
– a common economic area with four freedoms (free movement of commodities, services, capitals, and workforce);
– economic and monetary unions.

Together with the declaration of these objectives, the CIS countries set themselves the task of fully preserving their sovereignty and refused to form any supra-national agencies, which fully contravened the above provisions. It is well known that even a customs union demands a partial relaying of sovereignty to supra-national agencies, to say nothing of economic and monetary unions. Since the member countries realized this in the mid-1990s, there has been no mention of the Commonwealth’s final goals.

The first serious attempt to reform the CIS was begun at the end of the 1990s, following a range of bustling summit conferences. The institutional reorganization of the CIS made its bureaucratic machinery less cumbersome, yet the member states failed to bring together the rather disunited governing bodies. The task of creating a free trade zone was solved de facto, mostly through bilateral agreements. In other words, the planned reform was aborted, while a spontaneous reform took place. Over the past few years, the Commonwealth has evolved into a general political organization in an era of pragmatism, a “club of presidents” and a forum for discussing a wide range of political problems, including global ones.

This is certainly not a bad thing. We can only applaud the growing cooperation in such areas as the fight against terrorism and extremism, maintenance of security, and interaction between law enforcement agencies, as well as humanitarian and cultural institutions. The Commonwealth is thus achieving realistic goals and objectives.

It seems that a radical reform of the CIS, with a view to transforming it into an efficient integrated economic union, is not necessary as new organizations with clear objectives and mechanisms have spun off from it in recent years. These are the Eurasian Economic Community, the Common Economic Area and the Collective Security Treaty Organization.

International experience testifies to the success of this sort of scenario. History knows of instances where one and the same group of countries have set up different organizations with similar goals over a rather brief period of time. If the first attempt appeared to be unsuccessful, the initial organization would not be disbanded but a new one would be immediately set up. A good example is the 1948 Brussels Treaty of Economic, Social and Cultural Collaboration and Collective Self-Defense signed by Belgium, Britain, Luxembourg, the Netherlands and France. This document provided the basis for the 1954 Paris agreements that formalized the emergence of the West European Union (which ultimately united, besides the abovementioned countries, Italy and Germany). The organization proved to be quite inert, however – probably as inert as the CIS is at present – as its member countries failed to develop trade within its format. Several years passed, and the Treaties of Rome (signed in 1957 and enforced in 1958) opened the road to the emergence of a fully integrated European Economic Community which later grew into the European Union. Meanwhile, the West European Union continued to exist, and in the early 1990s the Europeans integrated it into the EU structures.

In other words, if the CIS is maintained as a “political frame” and a general political or humanitarian organization embracing the post-Soviet space – something like a mini-Council of Europe – then it may focus its efforts on consolidating the EurAsEC as an economic union and the Collective Security Treaty as a defense organization.
The EurAsEC has good prospects as a regional organization built on the basis of EU principles. Unlike the CIS, the decisions passed by this organization will reflect Russia’s economic weight, albeit not in full.

The EurAsEC has clear economic objectives and an institutional structure. It also has an efficiently functioning free trade zone. As stipulated by the Guidelines for EurAsEC Economic Development from 2003 Through 2006 and Beyond, by the end of 2006 preparations to establish an integrated customs union should be finished. Over the long term, economic and monetary unions may be possible, as well.

The EurAsEC is already getting practical economic content, with multilateral projects being implemented in the key economic sectors, such as energy and transport. This progress helps develop trade between the member countries at a faster rate than with other Commonwealth nations.

In 2004, Russia’s foreign trade turnover grew 34.6 percent, while trade with the EurAsEC member states saw an increase of 41.2 percent (and 34 percent with the CIS countries outside that economic community). Five years ago, Russia’s trade with the EurAsEC stood at U.S. $10 billion; today, it has exceeded $26 billion.
The Common Economic Area could also play a significant integrating role in the CIS. Russia’s partners in that association, set up in September 2003, are Ukraine (second biggest economy in the CIS), Belarus (Moscow’s closest, although somewhat controversial partner), and Kazakhstan (a dynamically developing country with rates of market reform ahead of Russia in some aspects).

The goals of that association are in many ways identical to those of the EurAsEC, and the list of participating countries is almost the same, as well. Yet the CEA legislation, although drafted just seven months after the president’s declaration of interest, is more advanced than that of the EurAsEC. In an unprecedented move, the participants prepared documents that meet the highest integration standards. Furthermore, the parties’ resolve for compromise during the course of the extremely complicated negotiations did not detract from the CEA content.

Success was achieved due to two crucial agreements. First, the parties regarded the Agreement, together with the ancillary Convention for the Common Economic Area, not as mere “papers for negotiations” subject to diplomatic bargaining, but as a universal, theoretically and practically verified model of integration that fixed the notion of the CEA and the sequence of steps to be taken in order to form it.

Second, the parties embedded into those documents the principle of integration at various levels and at a variegated pace. The CEA member-nations can determine the rates of their integration independently, but they cannot block integration steps taken by other countries. The founding countries agreed at the same time that all the measures pertaining to the CEA are interrelated and the countries taking part in the project will not have the right to choose what steps they will take and what steps they will ignore. In other words, the CEA is a standard lunch and not a menu а la carte.

The CEA documents incorporate several principles that sound quite revolutionary for the post-Soviet territories. All the four signatory countries have affirmed and ratified the provisions declaring the necessity of supra-national coordinating agencies. Simultaneously, they agreed that decisions would be taken with due account of the economic weight of each country. The CEA agencies will be built on the same principles that ensure the efficiency of the European Union.

Currently, the parties are working on a package of 85 documents that will make up the core of the CEA legislative base. At a CEA summit in Astana in September 2004, the leaders endorsed a list of priority documents subject to coordination and signing. A total of 29 are expected to be signed before July 1, 2005.

THE MAIN CHALLENGE

Ukraine represents a major trial for the CEA project, while the country’s new political elite doubts whether the CEA is compatible with its “European choice.” This question would still be relevant even had there been a different outcome of the recent presidential elections. Ukraine has been faithfully following a course for active integration into the European political and economic institutions and this is unlikely to change. The advantages of European integration for Ukraine are certain and very likely to increase in the future. Thus, any attempts to deny them are senseless, all the more so as Russia itself has clearly indicated the European vector in its policy and is moving toward forming ‘four common spaces’ with the EU.

A concept adopted at the 2003 Russia-EU summit in Rome states that the Common European Economic Space (CEES) embracing Russia and the EU aims to help the sides achieve closer coordination in their legal and economic systems and broaden cooperation in investment. It is also meant to promote contacts in the energy sector, coordinate the Russian and European transport systems, implement projects of pan-European importance, and develop cooperation in innovative and hi-tech spheres. It is worth remembering that the CIS countries account for a mere 17.9 percent of Russia’s foreign trade at the moment, while the EU share amounts to about 50 percent.

Ukraine also has more active ties with the European Union than with post-Soviet countries. The structure of Ukraine’s GDP has changed in recent years, with the services sector now having a much greater share; this fact certainly heightens the country’s interest in an access to European markets. Apart from objective factors underlying Kiev’s choice in favor of Europe, there are subjective, ethno-psychological factors: the traditional jealousy toward the Moskals [a derogatory word derived from ‘Moscow’ that the Ukrainians refer to the Russians – Ed.] and the desire to lead the Russians in absolutely every sphere of activity. The traditional mixture of love and hatred for Poland plays a role, too, which can be summed up by a phrase heard amongst the Ukrainians “The Poles are in NATO and the EU, and are we any worse?”

Nor should one underestimate the very dynamics of European integration, as the EU systematically draws countries along its periphery – “the new neighbors” in its own terminology – into its orbit. Since the formation of the alternative centers of integration – the CIS, EurAsEC and CEA – has not been completed and since these centers have yet to demonstrate their economic advantages, Ukraine is naturally getting sucked into the “European hoover.” Moldova and Belarus are most likely to follow in its footsteps.

The expanding EU is becoming more and more attractive to new members for a number of reasons. Previously, when the EU united 6 to 12 countries, the leading positions were occupied by big countries – Germany, France, Britain and Italy. Today, their dominance in the Europe of 25 is being diffused. The weight of New Europe is putting pressure on Old Europe: present-day EU mechanisms make it possible for smaller countries to devise successful combinations against bigger countries, and they increasingly resort to these methods.

For the first time in history, the smaller European nations – Belgium, the Netherlands, Poland, Slovakia, Slovenia, the Czech Republic and others, which for centuries were mere objects in international relations that forcibly fell under the sway of one or another European empire – have become full-fledged subjects in international relations whose voice can really influence decision-making. This explains the triumph of the European Union idea and what makes it look so enticing for many CIS countries. Arguing against this fact without offering any tangible alternatives would be senseless.

The Common Economic Area could play the role of such an alternative. Membership in this organization does not contradict Ukraine’s European choice and does not rule out its future accession to the EU; Europe has known precedents of countries shifting from one organization to another. In the early 1970s, for example, Britain, Denmark, Ireland and several other countries abandoned the European Free Trade Association and joined the European Economic Community. Since Russia, too, is now engaged in forming a common economic space with the European Union (CEES), the norms and regulations for the Common Economic Area with the CIS countries must fully meet the norms of the CEES, i.e. the EU norms and rules. The basic difference is that the CEES does not imply forming supra-national bodies and transferring sovereign powers to them, while the CEA does suggest it. That is why the mechanism of parallel activity along those two directions is yet to be designed. Russia is already seeking such a move, purely out of its own interests. For Ukraine, membership in the CEA thus offers a dual advantage – it can have access to the partner countries’ markets, while preparing its economy, at the same time, for EU accession.

Nor should we rule out the possibility of the CEA becoming an efficient and self-reliant organization with supra-national powers, capable of competing with the EU in attracting new members. It is also possible that the process of forming the CEES will pave the way to forming a general common economic space that will someday embrace the EU and the CEA. If this happens, the problem of whether Ukraine belongs to the EU or the CEA will simply become irrelevant. Unfortunately, the Ukrainians have extremely politicized the CEA project, yet there is still hope it will take a pragmatic decision on the issue.

Naturally, a different scenario is also possible. Ukraine may simply refuse to work on the CEA project, or it may conclude an agreement on a free trade zone, while at the same time speeding up its preparations for EU accession. What will happen then?

In this situation, there will probably emerge an ‘integration at variegated pace.’ The CEA will function as three countries and coordinate its activities with the procedures prescribed by the EurAsEC. In this case, a common economic space will be established all the same, but alas, without Ukraine.

Russia and its partners in the CEA will be forced to take “preemptive” measures to minimize the costs arising from Ukraine’s speedy drive to the EU. Apart from the obviously discouraging political and humanitarian effects (concerning travel visas, the status of ethnic Russians living in Ukraine, the possible development of an inferiority complex among Russians with regard to “Ukrainian Europeans”), there are serious economic risks, as well.

Those risks were made evident by the integration experiences of Central and East European countries. Those nations were forced to revise all of their legislative norms and acts pertaining to trade and economic cooperation, as well as limit the access of Russian commodities and services to their markets. In Ukraine’s case, the risks are a hundred percent higher. Russia may acquire an extremely dangerous competitor right at its doorstep. Once Ukraine integrates into the European zone and also receives a free-trade regime with the CIS countries, Western investors may turn Ukraine into their base of operations. They will be attracted by its relatively inexpensive workforce, solid infrastructure and, most importantly, free access to the spacious Russian market.

How can Russia respond to the Ukrainian challenge? Protective measures, such as putting up massive barriers to Ukrainian commodities and services, or ending the free trade regime, do not meet the requirements of the time. As is well known, pre-emptive strikes are the best method of defense; so the best way for Russia to minimize the negative effects of Ukraine’s European integration is Russia’s own European integration.

Paradoxically as it may seem, in order to maintain and reinforce its positions in the post-Soviet territory, Russia must focus on enhancing the market-oriented and democratic transformations at home rather than defending that territory from “encroachment by alien powers.” Russia must modernize its economic system and become fully integrated into the world economy. This would include the earliest accession to the World Trade Organization and the creation of the Common European Economic Space.

The image of Russia standing at the crossroads has always scared its neighbors. History provides enough instances. Russia lost influence in Central and Eastern Europe during the abortive August 1991 coup. It was then that its former allies in the Council for Mutual Economic Assistance and Warsaw Pact, frightened by the Soviet Union’s unpredictability and the possible re-creation of the Iron Curtain, turned their eyes to Europe. Also, NATO and the European Union, hitherto apprehensive of costly schemes of integrating Central and East European nations, believed that the threat from the East was quite real.

Conversely, the past few years have shown that a stable, pragmatic, predictable Russia that builds its relations along the principle of “business only, no sentiments” has a real chance of keeping up and consolidating its positions in the post-Soviet space. More than that, it has a chance to take the lead in integrating into the global economy.