Eurasia is considered one of the key regions on the world map. Bilateral relations in this area include several important factors such as the distribution of energy resources, regional security and economic growth. In this context, Eurasian integration and in particular the Eurasian Economic Union (EEU) play a central role in understanding the complex and strategic dynamics of this region.
From this point of view, the Ankara Crisis and Political Research Center (ANKASAM) presents the views of Assistant Professor Paolo Pizzolo, a faculty member at Kraków Jagiellonian University Centre for International Studies and Development (CISAD), on assessing the geopolitics of Eurasia.
1- What is Eurasian integration, in particular the Eurasian Economic Union (EEU), and can you give an overview of its current status?
The Eurasian landmass is currently experiencing three major integration projects that overlap geographically to a certain extent: The European Union (EU), the Eurasian Economic Union (EEU) and China’s Belt and Road Initiative. The EU is a complex supranational organisation that uses economic interdependence to ensure peace and security on the European continent. In contrast, the EEU represents Russia’s attempt to establish a solid connection between the former Soviet states through economic means rather than military force. Finally, the Belt and Road Initiative demonstrates China’s desire to permanently connect the region through infrastructure and trade routes by both land and sea.
The EEU represents an economic union of several former Soviet states in Eurasia. Its establishment and development can be seen as one of Russia’s instruments for restoring its international power and prestige and strengthening its global influence. Today, the EEU comprises five member states – the Russian Federation, Belarus, Kazakhstan, Armenia and Kyrgyzstan – and three observer states – Cuba, Moldova and Uzbekistan. In addition, Tajikistan has been officially invited to join the organisation and has expressed its interest in doing so. Accession negotiations are still ongoing. South Ossetia, the breakaway region of Georgia, has also expressed an interest in joining the EEU. In total, the Eurasian Economic Union covers an area of 20 million km² and has a population of around 180 million people.
In 2022, the EEU’s gross domestic product (GDP) is estimated to be around USD 2.4 trillion. Significantly, the EEU countries produce more than 14 percent of the world’s oil and almost 20 percent of its natural gas. In recent years, Russian President Vladimir Putin has stated that Russia’s goal is to expand the EEU to include all former Soviet states except the three Baltic states, as well as EU and NATO member states. Putin’s geopolitical plan for the EEU is to build a strong supranational union of sovereign states, linking economies, legal systems, customs services and military capabilities to bridge Europe and Asia and create a balance between the EU, the United States and China as a pole of power.
The EEU is relatively new among regional integration organisations. It has functioned as a customs union since 2011 and as an economic union since 2015. Some believe that this organisation pursues both geopolitical goals and a long-term economic agenda. In economic terms, the EEU provides for the development of intra-regional economic relations between the member states, the modernization of their economies, the improvement of their global competitiveness and the creation of a single market. Today, we can say that the EEU is a functioning regional integration bloc that has been successful on the one hand, but has also proved problematic on the other, especially after the Russian-Ukrainian war.
The emergence and formation of the EEU went through various stages of development and was characterised by gradual integration. The idea of founding the EEU was first expressed in March 1994 by Kazakh President Nursultan Nazarbayev in a historic speech at Lomonosov State University in Moscow. At the heart of Nazarbayev’s rhetoric was the desire to develop a fully-fledged union between the countries of post-Soviet Eurasia on the basis of interconnected economies.
The Union should go beyond the Commonwealth of Independent States by creating expanded cooperation, a comprehensive institutional structure and far-reaching regulatory powers in key sectors of the economy. With this in mind, Kazakhstan, Russia and Belarus signed an agreement on a customs union in early 1995, aimed at eliminating mutual economic barriers that hinder the free exchange of goods and fair competition. In 2000, the desire to promote greater harmonisation of laws and deeper integration of countries’ economies led to the creation of a new integration structure, the Eurasian Economic Community (EurAsEC). In 2007, a treaty establishing the Customs Union was signed, which defined the common customs territory, created the basic infrastructure for integration and defined the long-term course of joint economic development.
The next step towards assimilation was the signing of the Declaration of Russia, Belarus and Kazakhstan on Eurasian Economic Integration in 2011, which led to the creation of the Common Economic Area (CEA). Finally, in 2014, Russia, Kazakhstan and Belarus signed the treaty establishing the Eurasian Economic Union in Astana. In the same year, Armenia and Kyrgyzstan also signed the accession treaty and soon became full members of the Union. It began its activities on January 1, 2015.
Institutionally, the EEU is only vaguely modelled on the EU. The most important body of the Union is the Supreme Eurasian Economic Council (SEEC), which is made up of the heads of state of the member states. The main task of the Council is to define the strategy, direction and prospects for the formation and development of the EEU and to take decisions on the implementation of the Union’s objectives. The Commission is made up of representatives of the individual Member States.
The judicial organ of the Union is represented by the Court of Justice of the Eurasian Economic Union in Minsk. The main task of the Court is to ensure the uniform application by the member states of international treaties and decisions taken by the EEU within the framework of agreements with third parties. For example, its decisions on the Common Customs Tariff are directly applicable and legally binding in the EEU countries.
The financial mechanisms of Eurasian integration are carried out within the framework of the Eurasian Development Bank (EDB) and the Eurasian Stability and Development Fund (ESDF). The Eurasian Development Bank, based in Almaty, is a regional international financial institution that prioritizes projects promoting mutual trade and investment. The ESDF focuses its activities on regional crisis management and financial stability. In this context, it resembles a ‘regional IMF’, acting as a lender of last resort in the provision of public budget credits and as a preferred credit source in the financing of infrastructure projects.
2. How do you assess the role of energy resources in Eurasian geopolitics, particularly the energy transit routes and their impact on regional security and economic development?
The role of energy resources in Eurasian geopolitics, especially energy transit routes, is of great significance. One of the key Eurasian regions where energy is particularly important is the Caucasus. For example, in the South Caucasus region, Azerbaijan represents a key player in the transit of gas and oil pipelines. Its oil and natural gas reserves make pipeline diversity a critical strategic goal for Azerbaijan. Today, Azerbaijan represents a vital energy route from the Caspian Sea through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline and the Baku-Tbilisi-Erzurum (BTE) gas pipeline.
Additionally, Azerbaijan is one of the primary actors in the Southern Gas Corridor (SGC) initiative, which aims to supply natural gas from the Caspian and Middle East regions to Europe, especially aiming to reduce dependency on Russian gas following the outbreak of war in Ukraine. This corridor’s route from Azerbaijan to Europe includes the BTE Pipeline (also known as the South Caucasus Pipeline, SCP) carrying gas from Azerbaijan’s Shah Deniz II field through Georgia to Turkey, the Trans Anatolian Natural Gas Pipeline (TANAP) transporting gas from Turkey to Greece, and the Trans Adriatic Pipeline (TAP) carrying gas from Greece through Albania to Italy.
Also, Azerbaijan exports oil to Georgia through the Baku-Supsa Pipeline and to Russia via the Baku-Novorossiysk Pipeline. The energy geopolitics of the South Caucasus highlights the significance of the Azerbaijan-Georgia-Turkey axis for west-east energy and transport routes. This importance is due to Azerbaijan’s natural resources, Georgia’s role as a transportation corridor, and Turkey’s access to world markets and international partners, primarily the European Union (EU).
The efficient interaction in the energy sector between Azerbaijan and Georgia has bolstered regional cooperation in the South Caucasus. Conversely, Armenia is completely reliant on Russia’s supply.
Moreover, Azerbaijan was the first country to join the Transport Corridor Europe-Caucasus-Asia (TRACECA), an international transportation program aimed at strengthening economic, trade, and transportation relations. This program includes the European Union (EU), some Eastern European countries, the Caucasus, and Central Asia. Lastly, Azerbaijan has further reinforced its cooperation with Georgia and Turkey through the Baku-Tbilisi-Kars (BTK) railway.
3. Can you explain how regional cooperation projects in Eurasia support regional economic growth and share successful examples of these projects?
The Eurasian Economic Union (EAEU) offers a prime example of how regional cooperation can bolster economic growth. If we look at the data, the Union’s GDP was around 1.6 trillion US dollars in 2015, increasing to approximately 2.4 trillion US dollars by 2022. Focusing on a brief one-year period, specifically January-March 2021 to January-March 2022, the EAEU’s GDP grew by 3.6%, reaching 471.8 billion US dollars. Additionally, there was a 5.1% increase in goods production and a 1.3% rise in service provision.
The Union provides its members with a coordinated energy policy and a framework for a common energy market, including electricity, gas, and oil products. In the long term, the ultimate goal is to expand the common market by eliminating all exemptions for goods and services, thereby creating a unified market.
Additionally, the founding agreement of the organization defines the key priorities of transportation policy in a long-term perspective. In this regard, member states have agreed to implement coordinated transportation policies aimed at ensuring economic integration and shaping a common transportation area.
Among the main directions of a coordinated agricultural policy are state support for agriculture, regulation of a common agricultural market, unified requirements in the production and circulation of products, and the development of agricultural product exports.
At the same time, the goals and objectives of a common industrial policy include implementing policies in areas such as trade, customs and tariffs, competition in public procurement, technical regulations, business development, transportation, and infrastructure. Furthermore, the EAEU aims to implement a coordinated macroeconomic policy, provide general rules for the coordination of labor migration, regulate the norms of financial markets, and harmonize the national tax policies of member states. The coordination of macroeconomic policies aims to support stability and increase sustainability among member states, enhancing economic integration through the synchronization of key economic indicators. The most important macroeconomic policy to be coordinated is monetary policy. In this context, the EAEU envisages three mandatory indicators: the debt/GDP ratio, the inflation rate, and the budget deficit.
Since its inception in 2015, the EAEU has ensured the free movement of goods, services, capital, and labor, and has followed coordinated and harmonized policies in sectors defined by the founding treaty and international agreements. Despite some ongoing challenges, it has increased cooperation among the national economies of member states and promoted stable development, leading to a general increase in living standards for the peoples of member states. This has presented a quite successful example of the integration project in Eurasia so far.
Dr. Paolo Pizzolo
Dr. Paolo Pizzolo is a Senior Lecturer at the Center for International Studies and Development (CISAD) of the Jagiellonian University in Kraków. He received his PhD in Political Science and International Relations from LUISS, Rome. He is a Research Associate at the Center for Cooperation with Eurasia, the Mediterranean and Sub-Saharan Africa (CEMAS) at La Sapienza University of Rome. He was also a postdoctoral fellow at the Center for Comprehensive European and International Studies at the Higher School of Economics (HSE) of the Moscow National Research University. His research interests include International Relations theory, geopolitics, Eurasian, Chinese and Euro-Atlantic relations, nations and nationalisms, and international history.
