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Today's paper. Last Updated: 05/31/2012

Experts Question Power of CIS Economic Body

Economists from the Commonwealth of Independent States and abroad have cast doubts on the effectiveness and powers of the group's first supranational organization, the Interstate Economic Committee, set up at last week's CIS Moscow summit.


The committee is intended to oversee a payments union, customs and a free trade zone as well as having jurisdiction over energy systems, transport and joint enterprises undertaken by states.


The committee, with a planned staff of 700, will be based in Moscow with branches in every state and main centers like St. Petersburg. Russia will hold 50 percent of the votes in recognition of its major funding role but an 80 percent majority will be needed to pass decisions, removing its automatic majority.


But analysts believe that like many of the documents signed by members of the CIS since it was formed in 1991, the IEC stands little chance of getting beyond an idea on paper. As Nezavisimaya Gazeta wrote Tuesday, "the train is stuck at Former Soviet Union station."


Belarussian President Alexander Lukashenko, one of the strongest advocates of economic union and the IEC among the CIS presidents, said before the summit last week, "I support the idea of the IEC but I want it to work."


Lukashenko said Belarus did not need or want a committee that only worked on paper, and would not finance the committee "with its planned 700 loafers," unless it fulfilled its function.


Ukraine signed up for the IEC after insisting on voting amendments. President Leonid Kuchma sees closer ties with Russia and greater integration as beneficial to Ukraine.


But Melissa Meeker, economic research associate at the Council of Advisers to the Ukrainian Parliament, said Tuesday that Kuchma's agreement to the IEC was perhaps "procrastination."


"He is trying to earn some forgiveness from Russia and delay payment for Ukraine's huge energy debts," she said.


Kuchma would not countenance monetary union, Meeker said. Even if both currencies stabilized, Ukraine would prefer to peg its currency to a Western currency.


Western analysts said there was a danger the IEC would work artificially to promote trade relations. "The potential for mischief is greater than the potential for good," said one Western economic adviser in Moscow on Tuesday.


"The most important thing for the development of trade is for governments to stay out of trade deals and let enterprises make and pay for their own deals."




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