How should the CIS proceed with integration? Today this question seems extremely paradoxical. After all, only three years ago these countries formed a single entity, the Soviet Union. Now, with great difficulty, they are attempting to create some kind of joint economic integration. The recent Moscow CIS summit meeting confirmed both the desirability and the difficulty of this process.
The difficulty is conditioned by the fact that, in the old Soviet Union, there was a clear disparity in the economic development of various republics. As a result, central Russia was highly industrialized and the republics of Central Asia were little more than suppliers of raw materials to the center.
In the three years of relative independence since the collapse of the Soviet Union, these differences have not only not gone away, they have become even more pronounced. In terms of economic reform, Russia has significantly outpaced all the other 11 countries of the CIS. This raises the question: Is integration possible under such conditions, and what kind of integration will it be?
On Oct. 21, the 12 leaders of the CIS signed a document calling for the creation of an Inter-State Economic Committee, a payments union and a customs union. In the words of Russian President Boris Yeltsin, this agreement puts an end to all discussion of whether or not economic integration is necessary. No one at the conference objected to this opinion. So, it would seem, the CIS is headed down the same road that the European Union once followed.
Yeltsin, though, is nothing if not a realist, and as such he also admitted that not all the members of the CIS are ready to actively participate in an economic union. But this does not mean the dream is dead. He stated that, in the early stages of integration, each country will be able to decide for itself to what extent it will participate in the new international structures that are emerging. Although this idea sounds good, it masks some serious economic problems. And these problems become even more evident when the CIS's situation is viewed through the prism of world experience.
The first step in the formation of the European Union, for example, was the formulation of Robert Schuman's plan in 1950 for the creation of the European Coal and Steel Community. Seven years later, the Rome agreements on the establishment of the European Economic Community and the European Atomic Energy Community were signed. All three institutions were based on real, concrete economic grounds.
The successes of the six original signatories led six more countries to join the EEC after 1973. For a number of countries, especially Spain and Portugal, entry into the community was far from simple. A certain period was necessary to harmonize the basic parameters of their economies with those of the EEC. It was only 40 years after the beginnings of European integration that the Maastricht Treaty was signed, wiping out the economic -- and, to some extent, the political -- borders of Europe.
Western Europe had to traverse this long and difficult path even though all the countries involved has similar, market-based economies and similar levels of economic development. In the CIS, obviously, the situation is completely different.
In the former Soviet Union, the inequalities of economic development between the republics was compensated for by a mechanism of subsidizing the least developed. That tradition continues to this day. In 1992, for example, Russian aid to the former Soviet republics totalled about $75 billion. Non-repayable assistance from Russia to Turkmenistan, Kazakhstan and Uzbekistan approached 50 percent of their gross domestic products. No wonder Turkmenistan was extremely reluctant to sign on to the idea of an economic union and was among the last to agree to the recent convention.
It should also be noted that a considerably less significant imbalance kept the United States and Canada from signing the NAFTA agreement with Mexico for several years. Nonetheless, the heads of the CIS agreed at the Moscow summit to create the first international organ of the commonwealth, one which will be empowered to make controlling decisions that will be binding on all member states.
The CIS leaders also had to tackle the problem of what would be the concrete prerogatives of this body, since obviously by nature it can only function if member states voluntarily relinquish some of their sovereignty. However, they were unable to come to any agreement on this issue and it will be taken up at the governmental level. During the discussion, it became evident that one possible danger is that the Inter-State Economic Committee could become some sort of directive body similar to the old Soviet State Planning Office, which was charged with strictly regulating the economic activity of every enterprise in the country.
In his remarks about the creation of the economic committee, Yeltsin admitted that it was essential to close the gap in economic development or else the committee would be doomed to failure. At the same time, though, most experts believe that it is the committee itself that must resolve the problem of evening out the reforms in the CIS. In short, the question will once again find its way to the agenda at the next CIS summit.
Before the latest Moscow meeting, the statistics concerning CIS summits were very bleak. Of the more than 400 decisions taken at these meetings, only about one-quarter have been converted into real action. Part of the explanation is that the former Soviet Union still has not completed its political "divorce" and, as a result, talk of anything "in common" provokes a kind of allergic reaction. However, concrete economic imperatives are, surprisingly quickly, overcoming the general aversion to the integration process.
Alexei Portansky is a political observer for Izvestia. He contributed this comment to The Moscow Times.
The difficulty is conditioned by the fact that, in the old Soviet Union, there was a clear disparity in the economic development of various republics. As a result, central Russia was highly industrialized and the republics of Central Asia were little more than suppliers of raw materials to the center.
In the three years of relative independence since the collapse of the Soviet Union, these differences have not only not gone away, they have become even more pronounced. In terms of economic reform, Russia has significantly outpaced all the other 11 countries of the CIS. This raises the question: Is integration possible under such conditions, and what kind of integration will it be?
On Oct. 21, the 12 leaders of the CIS signed a document calling for the creation of an Inter-State Economic Committee, a payments union and a customs union. In the words of Russian President Boris Yeltsin, this agreement puts an end to all discussion of whether or not economic integration is necessary. No one at the conference objected to this opinion. So, it would seem, the CIS is headed down the same road that the European Union once followed.
Yeltsin, though, is nothing if not a realist, and as such he also admitted that not all the members of the CIS are ready to actively participate in an economic union. But this does not mean the dream is dead. He stated that, in the early stages of integration, each country will be able to decide for itself to what extent it will participate in the new international structures that are emerging. Although this idea sounds good, it masks some serious economic problems. And these problems become even more evident when the CIS's situation is viewed through the prism of world experience.
The first step in the formation of the European Union, for example, was the formulation of Robert Schuman's plan in 1950 for the creation of the European Coal and Steel Community. Seven years later, the Rome agreements on the establishment of the European Economic Community and the European Atomic Energy Community were signed. All three institutions were based on real, concrete economic grounds.
The successes of the six original signatories led six more countries to join the EEC after 1973. For a number of countries, especially Spain and Portugal, entry into the community was far from simple. A certain period was necessary to harmonize the basic parameters of their economies with those of the EEC. It was only 40 years after the beginnings of European integration that the Maastricht Treaty was signed, wiping out the economic -- and, to some extent, the political -- borders of Europe.
Western Europe had to traverse this long and difficult path even though all the countries involved has similar, market-based economies and similar levels of economic development. In the CIS, obviously, the situation is completely different.
In the former Soviet Union, the inequalities of economic development between the republics was compensated for by a mechanism of subsidizing the least developed. That tradition continues to this day. In 1992, for example, Russian aid to the former Soviet republics totalled about $75 billion. Non-repayable assistance from Russia to Turkmenistan, Kazakhstan and Uzbekistan approached 50 percent of their gross domestic products. No wonder Turkmenistan was extremely reluctant to sign on to the idea of an economic union and was among the last to agree to the recent convention.
It should also be noted that a considerably less significant imbalance kept the United States and Canada from signing the NAFTA agreement with Mexico for several years. Nonetheless, the heads of the CIS agreed at the Moscow summit to create the first international organ of the commonwealth, one which will be empowered to make controlling decisions that will be binding on all member states.
The CIS leaders also had to tackle the problem of what would be the concrete prerogatives of this body, since obviously by nature it can only function if member states voluntarily relinquish some of their sovereignty. However, they were unable to come to any agreement on this issue and it will be taken up at the governmental level. During the discussion, it became evident that one possible danger is that the Inter-State Economic Committee could become some sort of directive body similar to the old Soviet State Planning Office, which was charged with strictly regulating the economic activity of every enterprise in the country.
In his remarks about the creation of the economic committee, Yeltsin admitted that it was essential to close the gap in economic development or else the committee would be doomed to failure. At the same time, though, most experts believe that it is the committee itself that must resolve the problem of evening out the reforms in the CIS. In short, the question will once again find its way to the agenda at the next CIS summit.
Before the latest Moscow meeting, the statistics concerning CIS summits were very bleak. Of the more than 400 decisions taken at these meetings, only about one-quarter have been converted into real action. Part of the explanation is that the former Soviet Union still has not completed its political "divorce" and, as a result, talk of anything "in common" provokes a kind of allergic reaction. However, concrete economic imperatives are, surprisingly quickly, overcoming the general aversion to the integration process.
Alexei Portansky is a political observer for Izvestia. He contributed this comment to The Moscow Times.
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