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Member States of the Eurasian Economic Union Concerned Over Anti-Russian Sanctions of the USA

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The confrontation between Russia and the West has had a negative impact on the closest partners of Moscow that share in the trade and economic market with Russia. Thus, the member states of the Eurasian Economic Union (EAEU), including Russia, Belorussia, Kazakhstan, Armenia and Kyrgyzstan, have been concerned over the new law on sanctions against Russia, Iran and North Korea signed by U.S. President Donald Trump (www.whitehouse.gov, August 02).

President of Kazakhstan Nursultan Nazarbayev during the working meeting with Prime Minister Bakytzhan Sagintayev emphasized that a new wave of U.S. sanctions against Russia may have impact on the economy of Kazakhstan. “I address everyone, before the year is out; we have to work hard to finish the year in an orderly way. There is a substantial risk. There are price fluctuations for our energy carriers and raw materials. It might be the influence of sanctions against Russia. That fact must be taken into account,” Nazarbayev said (http://www.akorda.kz, August 07).

It should be emphasized that a new package of U.S. economic sanctions against Russia is the response of the U.S. to the Russian interference into the American presidential elections, annexation of Crimea, and the support of armed separatists in eastern Ukraine. The package imposes restrictions on Russian energy companies such as Gazprom, Rosneft, Lukoil, which are actively operating in Central Asian states. The U.S. president may not curtail or lift sanctions without congressional approval.

The market of Kazakhstan has responded nervously to the new list of sanctions. In early August, the national currency of Kazakhstan depreciated by 15 points against the U.S. dollar, i.e. the Kazakh tenge depreciated by 3.5%. If before the American sanctions, one USD was equal to KZT 334.5, after August 2, the USD exchange rate jumped as high as KZT 343. The currency market of Kazakhstan faced the devaluation with hysteria and panic. In this regard, the National Bank of Kazakhstan had to make an official statement where it condemned the speculative actions of some commercial banks and called on the population to stay calm. However, the National Bank honestly claimed that “the current dynamics of the tenge rate is explained first by the expected negative impact of additional sanctions of the USA against the Russian Federation, the uncertain further development of the situation, as well as the respective dynamics of the Russian ruble. Certain speculative comments in the media fuel the panic buying of US dollars” (www.zakon.kz, August 2).

Such explanations by the national bank of the country expectedly caused the discontent of the Kazakh society about the dependence of the tenge rate on the fluctuations in the Russian ruble and the ups and downs of the Kremlin’s foreign policy. Due to the increased volatility of the tenge to dollar rate in the domestic currency market, the National Bank of Kazakhstan has decided to decrease the reference rate to 10.25% (www.nationalbank.kz, August 21).

After the introduction of anti-Russian sanctions, the markets of other member states of EAEU – Belorussia and Kyrgyzstan – have faced reduced economic performance and a nervous environment in the financial sector. The American sanctions against Russia have already had a negative impact on the economy of Belorussia, which is closely connected with the Russian market. In particular, restrictive measures have affected the performance of Belorussian banks, many of which are the subsidiaries to the Russian banks. According to Alpari Forex Broker analyst Vadim Iosub, “U.S. sanctions have shortened the period of loans granted to Russian banks. Now these banks may not attract long-terms loans on western markets. Respectively, the subsidiaries of these banks in Belorussia will need to adjust their plans” (www.naviny.by, July 29).

The U.S. sanctions against Russia have the same negative impact on the Kyrgyz economy, too. In the interview with the Kyrgyz analyst, Arslan Kapai, he said, “in the long term, the anti-Russian sanctions may damage the economic growth rate of Kyrgyzstan given that Moscow is a key trade and economic and investment partner of Bishkek.” Therefore, it should be noted that Kyrgyzstan remains the most vulnerable and poor state among other EAEU members. The Eurasian Economic Union is known to be established at the initiative of Russia and it is the main instrument to get the states of former USSR back under the influence of Moscow. It is the political and economic dependence on the Kremlin that has forced President of Kyrgyzstan Almazbek Atambayev to sign the Agreement on the Eurasian Economic Union (www.eaeunion.org, August 12, 2015).

It should be noted that after Atambayev came to power, he not only bound the Kyrgyz economy to the financial system of Russia, but he was also actively pursuing an anti-American policy for 7 years. Based on the “recommendation” of the Kremlin, he forced the US airbase to leave Kyrgyzstan that participated in the Operation Enduring Freedom – Afghanistan against the international terrorism. (www.ria.ru, June 03, 2014).  

One year later Atambayev defiantly denounced the Agreement Between the Governments of the United States of America and the Government of the Kyrgyz Republic Regarding Cooperation, which was the basis of the bilateral cooperation (www.24.kg, July 21, 2015). And this summer the Kyrgyz president blamed the Government of the United States for pushing Uzbekistan for the conflict with Kyrgyzstan. He claimed he had no warm sentiments about the policy pursued by the U.S. State Department run by Democrats. Atambayev openly blamed the United States for the interventions into his national affairs reminding that Americans “actually pushed for, encouraged the conflict between the two fraternal peoples – the Kyrgyz and the Uzbeks” (www.sputnik.kg, July 24, 2017).

The result of the unilateral pro-Russian policy of the Atambayev’s Government was full dependence of the Kyrgyz national economy on the Russian economy. In 2013, the strategic gas industry of the republic was sold just for $1 to the Russian Gazprom, which is now under the Western sanctions (www.fergananews.com, July 29, 2013). Oil products and fuel and lubricants are 100% imported to Kyrgyzstan from Russia, where the main supplier is Rosneft, which is also under the sanction imposed by the Government of the United States. After the accession to the Eurasian Economic Union, Kyrgyzstan has lost its transit corridor for the transit of the Chinese goods to other CIS states, which brought multimillion profit to the public treasury. According to Minister of Finance Adylbek Kasymaliev, as a result, the government debt of Kyrgyzstan is $4 billion 243 million, which is approximately the annual budget of the country (www.azattyk.org, July 22, 2017). After the accession to the EAEU, no particular breakthroughs in the development of the industrial production have occurred, as was promised by Atambayev. All these indicators show that the economy of Kyrgyzstan may suffer from the anti-Russian sanctions more than others.

Armenia, a member to EAEU since January 2015, is seriously concerned over the new package of American sanctions against Russia. The Armenian Minister of Finance, Vardan Aramyan, noted that “American sanctions against Russia and Iran will damage the economy of Armenia” (www.regnum.ru, August 5, 2015). This concern is caused by the fact that the new sanctions of the United States are mainly against the Russian oil and gas sector. Today the Russian Gazprom fully provides Armenia and Kyrgyzstan with natural gas. Due to the sanctions, Gazprom may raise the natural gas prices for Armenia and Kyrgyzstan. This can lead to the growing prices of electricity, food and oil products, which will cause a wave of discontent.

Migrant workers from Central Asia and Caucasus working in Russia are also seriously concerned about the anti-Russian sanctions imposed by the United States. In particular, the authorities of Uzbekistan, Tajikistan, Turkmenistan, Kazakhstan, Kyrgyzstan, Armenia and Azerbaijan expect the massive return of their citizens from Russia, if sanctions lead to certain job cuts in Russia. According to the Main Directorate for Migration Affairs of the Ministry of Internal Affairs of Russia, today about half a million citizens of Armenia, 600,000 citizens of Azerbaijan, over 2 million citizens of Uzbekistan, over 2 million citizens of Ukraine, one million citizens of Tajikistan and Kyrgyzstan, 500,000 citizens of Kazakhstan work in Russia. Deterioration in the economic situation in Russia may reduce the amount of money transferred by migrants to their homeland. Today transfers from Russia constitute the major part of all transfers to Armenia, Uzbekistan, Kyrgyzstan and Tajikistan. For example, last year Kyrgyz migrants in Russia transferred $2.4 billion home, which is one half of the national GDP. A possible reduction of money transfers from Russia and a massive return of Kyrgyz migrant workers back home may lead to another color revolution in Kyrgyzstan.

Thus, the inclusion of Russia into the list of rogue states along with Iran and North Korea has expectedly caused concern of the political leaders of post-Soviet countries that have Moscow as their main trade and economic partner. It has become obvious that Russia cannot symmetrically respond to the American sanctions. Instead, the Kremlin applies its favorite method of causing anti-American mood in the authoritarian leaders and residents of CIS.

However, the anti-Russian sanctions of the West may give a good chance to Central Asian and Caucasian states to reduce the imperial influence of Moscow on their national economies. “The current American sanctions package is a step toward removing Russia from the world globalization process,” outstanding political expert Lilia Shevtsova concluded (www.svoboda.org, August 1, 2017). It remains to be seen whether the CIS states will use this opportunity.

Doctor of Political Science (PhD), expert on Political Islam. Modern Diplomacy Advisory Board, Member. SpecialEurasia, Team Member.

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Putin’s post-Soviet world remains a work in progress, but Africa already looms

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Russian civilisationalism is proving handy as President Vladimir Putin seeks to expand the imaginary boundaries of his Russian World, whose frontiers are defined by Russian speakers and adherents to Russian culture rather than international law and/or ethnicity.

Mr. Putin’s disruptive and expansive nationalist ideology has underpinned his aggressive

 approach to Ukraine since 2014 with the annexation of Crimea and the stoking of insurgencies in the east of the country. It also underwrites this month’s brief intervention in Kazakhstan, even if it was in contrast to Ukraine at the invitation of the Kazakh government.

Mr. Putin’s nationalist push in territories that were once part of the Soviet Union may be par for the course even if it threatens to rupture relations between Russia and the West and potentially spark a war. It helps Russia compensate for the strategic depth it lost with the demise of communism in Europe and the collapse of the Soviet Union.

However, equally alarmingly, Mr. Putin appears to be putting building blocks in place that would justify expanding his Russian World in one form or another beyond the boundaries of the erstwhile Soviet Union.

In doing so, he demonstrates the utility of employing plausibly deniable mercenaries not only for military and geopolitical but also ideological purposes.

Standing first in line is the Central African Republic. A resource-rich but failed state that has seen its share of genocidal violence and is situated far from even the most expansive historical borders of the Russian empire, the republic could eventually qualify to be part of the Russian world, according to Mr. Putin’s linguistic and cultural criteria.

Small units of the Wagner Group, a private military company owned by one of Mr. Putin’s close associates, entered the Centra African Republic once departing French troops handed over to a United Nations peacekeeping force in 2016. Five years later, Wagner has rights to mine the country’s gold and diamond deposits.

Perhaps surprisingly, the Russian mercenary presence persuaded President Faustin-Archange Touadera that the African republic should embrace Russian culture.

As a result, university students have been obliged to follow Russian-language classes starting as undergraduates in their first year until their second year of post-graduate studies. The mandate followed the introduction of Russian in the republic’s secondary school curriculum in 2019.

Mr. Touadera is expected to ask Mr. Putin for Russian-language instructors during a forthcoming visit to Moscow to assist in the rollout.

Neighbouring Mali could be next in line to follow in Mr. Touadera’s footsteps.

Last month, units of the Wagner Group moved into the Sahel nation at the request of a government led by army generals who have engineered two coups in nine months. The generals face African and Western sanctions that could make incorporating what bits of the country they control into the Russian world an attractive proposition.

While it is unlikely that Mr. Putin would want to formally welcome sub-Saharan and Sahel states into his Russian world, it illustrates the pitfalls of a redefinition of internationally recognised borders as civilisational and fluid rather than national, fixed, and legally enshrined.

For now, African states do not fit Mr. Putin’s bill of one nation as applied to Ukraine or Belarus. However, using linguistics as a monkey wrench, he could, overtime or whenever convenient, claim them as part of the Russian world based on an acquired language and cultural affinity.

Mr. Putin’s definition of a Russian world further opens the door to a world in which the principle of might is right runs even more rampant with the removal of whatever flimsy guard rails existed.

To accommodate the notion of a Russian world, Russian leaders, going back more than a decade, have redefined Russian civilisation as multi-ethnic rather than ethically Russia.

The Central African Republic’s stress on Russian-language education constitutes the first indication in more than a decade that Mr. Putin and some of his foreign allies may expand the Russian world’s civilisational aspects beyond the erstwhile Soviet Union.

Some critics of Mr. Putin’s concept of a Russian world note that Western wars allegedly waged out of self-defense and concern for human rights were also about power and geopolitical advantage.

For example, pundit Peter Beinart notes that NATO-led wars in Serbia, Afghanistan, and Libya “also extended American power and smashed Russian allies at the point of a gun.”

The criticism doesn’t weaken the legitimacy of the US and Western rejection of Russian civilisationalism. However, it does undermine the United States’ ability to claim the moral high ground.

It further constrains Western efforts to prevent the emergence of a world in which violation rather than the inviolability of national borders become the accepted norm.

If Russian interventionism aims to change borders, US interventionism often sought to change regimes. That is one driver of vastly different perceptions of the US role in the world, including Russian distrust of the post-Soviet NATO drive into Eastern Europe and independent former Soviet states such as Ukraine.

“People with more experience of the dark side of American power—people whose families hail from Guatemala, Chile, Brazil, Haiti, or Mexico, where US guns have sabotaged democracy rather than defended it—might find it easier to understand Russian suspicions. But those Americans tend not to shape US policy towards places like Ukraine,” Mr. Beinart said.

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Neighbours and Crises: New Challenges for Russia

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Through all the discussions that accompanied the preparation of the Valdai Club report “Space Without Borders: Russia and Its Neighbours”, the most clear question was whether Russia should or should not avoid repeating the historical experience of relations with its near abroad. This experience, in the most general terms, is that after Russia pacifies its western border with its foreign policy, the Russian state inevitably must turn to issues related to the existence of its immediate neighbourhood. With a high degree of probability, it will be forced to turn to its centuries-old method for solving problems that arise there: expansion for the sake of ensuring security.

Now Russia’s near abroad consists of a community of independent states that cannot ensure their own security and survival by relying only on their own forces; we cannot be completely sure of their stability. From Estonia in the west to Kyrgyzstan in the east, the existence of these countries in a competitive international environment is ensured by their link with one of the nuclear superpowers. Moreover, such connections can only complement each other with great difficulty. As the recent developments in Kazakhstan have demonstrated, they are not limited to the threat of an external invasion; even internal circumstances can become deadly.

The dramatic events in that country were intensified by external interference from the geostrategic opponents of Russia, as well as international terrorists, but it would be disingenuous to argue that their most important causes are not exclusively internal and man-made. We cannot and should not judge whether the internal arrangements of our neighbours are good or bad, since we ourselves do not have ideal recipes or examples. However, when dealing with the consequences, it is rational to fear that their statehood will either be unable to survive, or that their existence will take place in forms that create dangers which Russia cannot ignore.

In turn, the events experienced now in relations between Russia and the West, if we resort to historical analogies, look like a redux of the Northern War. The Great Northern War arose at the beginning of the 18th century as the result of the restoration of Russia’s power capabilities; the West had made great progress in approaching the heart of its territory. Within the framework of this logic, victory, even tactical victory, in the most important (Western) direction will inevitably force Russia to turn to its borders. Moreover, the reasons for paying more attention to them are obvious. This will present Russia with the need to decide on how much it is willing to participate in the development of its neighbours.

The developments in Kazakhstan in early January 2022 showed the objective limits of the possibilities of building a European-style sovereign state amid new, historical, and completely different geopolitical circumstances. More or less all the countries of the space that surrounds Russia, from the Baltic to the Pamir, are unique experiments that arose amid the truly phenomenal orderliness of conditions after the end of the Cold War. In that historical era, the world really developed under conditions where a general confidence prevailed that the absolute dominance of one power and a group of its allies creates conditions for the survival of small and medium-sized states, even in the absence of objective reasons for this.

The idea of the “end of history” was so convincing that we could accept it as a structural factor, so powerful that it would allow us to overcome even the most severe objective circumstances.

The Cold War era created the experience of the emergence and development of new countries, which until quite recently had been European colonies. Despite the fact that there are a few “success stories” among the countries that emerged after 1945, few have been able to get out of the catch-up development paradigm. However, it was precisely 30 years ago that there really was a possibility that a unipolar world would be so stable that it would allow the experiment to come to fruition. The visible recipes of the new states being built were ideal from an abstract point of view, just as Victor Frankenstein was guided by a desire for the ideal.

Let us recall that the main idea of our report was that Russia needs to preserve the independence of the states surrounding it and direct all its efforts to ensure that they become effective powers, eager to survive. This desire for survival is seen as the main condition for rational behaviour, i.e. creating a foreign policy, which takes into account the geopolitical conditions and the power composition of Eurasia. In other words, we believe that Russia is interested in the experiment that emerged within the framework of the Liberal World Order taking place under new conditions, since its own development goals dictate that it avoid repeating its past experience of full control over its neighbours, with which it shares a single geopolitical space.

This idea, let’s not hide it, prompted quite convincing criticism, based on the belief that the modern world does not create conditions for the emergence of states where such an experience is absent in more or less convincing forms. For Russia, the challenge is that even if it is technically capable of ensuring the immediate security of its national territory, the spread of the “grey zone” around its borders will inevitably bring problems that the neighbours themselves are not able to solve.

The striking analogy proposed by one colleague was the “hallway of hell” that Russia may soon face on its southern borders, making us raise the question that the absence of topographic boundaries within this space makes it necessary to create artificial political or even civilisational lines, the protection of which in any case will be entrusted to the Russian soldier. This January we had the opportunity to look into this “hallway of hell”. There is no certainty that the instant collapse of a state close to Russia in the darkest periods of its political history should be viewed as a failure in development, rather than a systemic breakdown of the entire trajectory, inevitable because it took shape amid completely different conditions.

Therefore, now Russia should not try to understand what its further strategy might be; in any case, particular behaviour will be determined by circumstances. Our task is to explore the surrounding space in order to understand where Russia can stop if it does not want to resort to the historical paradigm of its behaviour. The developments in Kazakhstan, in their modern form, do not create any grounds for optimism or hopes for a return to an inertial path of development. Other states may follow Ukraine and Kazakhstan even if they now look quite confident. There are no guarantees — and it would be too great a luxury for Russia to accept such a fate.

This is primarily because the Russian state will inevitably face a choice between being ready for several decades of interaction with a huge “grey zone” along the perimeter of its borders and more energetic efforts to prevent its emergence. It is unlikely that Moscow would simply observe the processes taking place on its immediate periphery. This is not a hypothetical invasion of third forces — that does not pose any significant threat to Russia. The real challenge may be that in a few decades, or sooner, Moscow will have to take on an even greater responsibility, which Russia got rid of in 1991. Even now, there seems to be a reason to believe that thirty years of independence have made it possible to create elements of statehood that can be preserved and developed with the help of Russia.

from our partner RIAC

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Do as You’re Told, Russia Tells the Neighborhood

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The Kremlin has always argued that it has special interests and ties to what once constituted the Soviet space. Yet it struggled to produce a smooth mechanism for dealing with the neighborhood, where revolutionary movements toppled Soviet and post-Soviet era political elites. Popular movements in Georgia, Ukraine, Moldova, Kyrgyzstan, and most recently Kazakhstan have flowered and sometimes triumphed despite the Kremlin’s rage.

Russia’s responses have differed in each case, although it has tended to foster separatism in neighboring states to preclude their westward aspirations. As a policy, this was extreme and rarely generated support for its actions, even from allies and partners. The resultant tensions underlined the lack of legitimacy and generated acute fear even in friendlier states that Russia one day could turn against them.

But with the activation of the hitherto largely moribund six-nation Collective Security Treaty Organization (CSTO) in Kazakhstan seems to be an entirely different matter. Here, for the first time since its Warsaw Pact invasions, Russia employed an element of multilateralism. This was designed to show that the intervention was an allied effort, though it was Russia that pulled the strings and contributed most of the military force.

CSTO activation is also about something else. It blurred the boundaries between Russia’s security and the security of neighboring states. President Vladimir Putin recently stated the situation in Kazakhstan concerned “us all,” thereby ditching the much-cherished “Westphalian principles” of non-intervention in the internal affairs of neighboring states. The decision was also warmly welcomed by China, another Westphalia enthusiast.

In many ways, Russia always wanted to imitate the US, which in its unipolar moment used military power to topple regimes (in Afghanistan and Iraq) and to restore sovereignty (in Kuwait.) Liberal internationalism with an emphasis on human rights allowed America and its allies to operate with a certain level of legitimacy and to assert (a not always accepted) moral imperative. Russia had no broader ideas to cite. Until now. Upholding security and supporting conservative regimes has now become an official foreign policy tool. Protests in Belarus and Kazakhstan helped the Kremlin streamline this vision.

Since Russia considers its neighbors unstable (something it often helps to bring about), the need for intervention when security is threatened will now serve as a new dogma, though this does not necessarily mean that CSTO will now exclusively serve as the spearhead of Russian interventionist policy in crises along its borders. On the contrary, Russia will try to retain maneuverability and versatility. The CSTO option will be one weapon in the Kremlin’s neighborhood pacification armory.

Another critical element is the notion of “limited sovereignty,” whereby Russia allows its neighbors to exercise only limited freedom in foreign policy. This is a logical corollary, since maneuverability in their relations with other countries might lead to what the Kremlin considers incorrect choices, like joining Western military or economic groupings.

More importantly, the events in Kazakhstan also showed that Russia is now officially intent on upholding the conservative-authoritarian regimes. This fits into a broader phenomenon of authoritarians helping other authoritarians. Russia is essentially exporting its own model abroad. The export includes essential military and economic help to shore up faltering regimes.

The result is a virtuous circle, in the Kremlin’s eyes. Not only can it crush less than friendly governments in its borderlands but it also wins extensive influence, including strategic and economic benefits. Take for instance Belarus, where with Russian help, the dictator Aliaksandr Lukashenka managed to maintain his position after 2020’s elections through brutality and vote-rigging. The end result is that the regime is ever-more beholden to Russia, abandoning remnants of its multi-vector foreign policy and being forced to make financial and economic concessions of defense and economics to its new master. Russia is pressing hard for a major new airbase.

A similar scenario is now opening up in Kazakhstan. The country which famously managed to strike a balance between Russia and China and even work with the US, while luring multiple foreign investors, will now have to accept a new relationship with Russia. It will be similar to Belarus, short of integration talks.

Russia fears crises, but it has also learned to exploit them. Its new approach is a very striking evolution from the manner in which it handled Georgia and Ukraine in 2008 and 2014, through the Belarus and Armenia-Azerbaijan crises in 2020 to the Kazakh uprising of 2022.

Russia has a new vision for its neighborhood. It is in essence a concept of hierarchical order with Russia at the top of the pyramid. The neighbors have to abide by the rules. Failure to do so would produce a concerted military response.

Author’s note: first published in cepa

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