Regionalisation and regionalism in the post-Soviet space: Current status and implications for institutional development

Abstract

The aim of this article is to analyse the nexus of integration and disintegration processes in the post-Soviet space. On the one hand it considers ‘formal’ regionalism projects and the reasons for their inefficiency, and explores the real impetus behind the repeated attempts at top-down regional integration by post-Soviet elites. On the other hand, it analyses the bottom-up regionalisation of the post-Soviet space through the investment activity of Russian corporations, and demonstrates possible effects of this process for institutional development.

Notes

¹There are also some projects, which were formed without the direct participation of Russia, which will only be mentioned briefly here. The most important example is the GUAM, established by (and named after) Georgia, Ukraine, Azerbaijan and Moldova to oppose Russian influence in the post-Soviet space. Originally the organisation focused on the development of the pipeline network for Caspian oil and on participation in the TRACECA (Transport Corridor Europe – Caucasus – Asia) project. After the ‘Orange Revolution’ in Ukraine, the GUAM was ‘revived’: in May 2006 the members of GUAM agreed to establish a free trade area, to develop new instruments of political and economic cooperation and to transform GUAM into a full-scale international organisation. The Organisation of the Central Asian Cooperation (OCAC) was also established as a ‘sub-regional’ integration area; however, after Russia's accession to the OCAC in 2004 it became similar to the EAEC and other structures. In 2005 the OCAC merged with the EAEC. It may have been one of the reasons for Kazakhstan and Uzbekistan starting discussions on a new integration project of the Union of Central-Asian States.

²The gravity models expect the volume of trade between countries to be proportional to the size of their GDP and the distance. Therefore, it is possible to make an ad-hoc assessment of intra-regional trade, given distances between CIS countries and the rest of the world, as well as relations of GDP. In the case of the CIS these estimations are lower than the de-facto intra-regional trade; hence, there are other factors, which are not covered by the model and cause path dependency in trade relations.

³For example, according to the estimates of the Barometer of Eurasian Integration, 35% of the Russian population, 57% of the Ukrainian and 69% of the Belorussian have relatives in neighbouring CIS countries. See Ekonomika i vremya, 5 July 2005.

⁴ Kommersant, 1 June 2006.

⁵See also Kosikova (2004). This trend did not continue into 2005 because of the introduction of the destination principle into value added taxation in the Eurasian Economic Community. The destination principle means that the value added tax is taxed by the country where the goods are sold (i.e. the importing country). On the contrary, the origin principle implies taxation in the exporting country. For example, when Russia applied the origin principle in the past for its oil and gas, it was motivated by the advantages this brought for the national household (otherwise the tax income would be received by the importers).

⁶In 2005 there was a slight reduction by 10% as compared to 2004, mostly because of a decrease of Russian investments in Uzbekistan, which is probably going to be compensated in the near future: after its accession to the EAEC Uzbekistan's government started negotiations with Russian corporations to establish new attractive investment projects.

⁷The database is located at http://www.securities.com, accessed 1 May 2006.

⁸Smart Group is the only example of this type of investor mentioned in the Appendix.

⁹ Metallosnabzhenie i sbyt, 2 February 2005.

¹⁰As defined above, regionalisation is mostly an economic process; however, it is interesting to find out whether there are any forms of cooperation of non-governmental political actors in the region. Several post-Soviet political parties established contacts with their counterparts in other countries of the CIS. For example, the Russian governing party Edinaya Rossiya signed a cooperation treaty with Kazakhstan's pro-presidential Otan in 2006 and cooperates with the Ukrainian Party of Regions of Viktor Yanukovich. The opposition movements in the CIS also cooperate: for example, members of the Russian Yabloko and SPS (Soyuz Pravykh Sil) used to participate in opposition protest actions in Belarus; the Ukrainian movement Pora, which played the central role in the ‘Orange Revolution’ in 2004, is reported to support similar opposition movements in other CIS countries. However, in the majority of post-Soviet political systems non-governmental actors do not play an important role and therefore the political – economic effects of their cooperation are limited.

¹¹See discussion and critique of this thesis in Grinberg (2004) and Kheifets (2005).

¹²See Kazin (2002) and Jackson (2003) for overviews of the related discussion in the Russian political community with respect to the CIS.

¹³For the distinction see Collins (2004).

¹⁴Exceptions are Turkmenistan with its strong totalitarian political system, Moldova's parliamentary democracy, and, to a certain extent, Georgia and Ukraine since 2003 and 2004, respectively.

¹⁵For example, the problems with the distribution of the foreign property of Austria – Hungary were finally settled in 1986, i.e. about 70 years after the end of World War I.

¹⁶National corporations may also be interested in a kind of protective integration if the imitation of integration activity prevents real economic opening up with increasing competition from other regions of the world (Evstigneev 1997). Osmakov and Kopylov (2003) describe the post-Soviet integration projects as an ‘integration of common exclusions’ instead of ‘common rules’, as their core is to guarantee exclusive monopolistic positions for every participant.

¹⁷Similar results could be inferred from the World Value Survey, available at: http://wvs.isr.umich.edu/index.shtml, accessed 15 December 2005.

¹⁸ Berliner Zeitung, 21 July 2005; Financial Times, 4 March 2005.

¹⁹ Frankfurter Allgemeine Zeitung, 29 December 2004.

Additional information

Notes on contributors

Alexander Libman

Earlier versions of several sections of this article were presented at the CSGR/CIGI/UNU-CRIS conference ‘Regionalisation and the Taming of Globalisation? Economic, Political, Security, Social and Governance Issues’ (Warwick, UK) in October 2005, at Philipps-University Marburg (Germany) in November 2005 and at the European School on New Institutional Economics (Cargese, France) in May 2006. The author thanks participants of the conferences as well as Ruslan Grinberg, Boris Kheifets and his colleagues from the Centre for Problems of Integration of the Institute of Economics of the Russian Academy of Sciences for helpful remarks and two anonymous referees for important comments. All mistakes remain my own. Financial support of the Charity Reserve Foundation is gratefully acknowledged.