Could the Russian Mob Take
Advantage of the Eurasian Economic Union?
The new bloc could allow more
than just the free flow of goods, capital and labor.
By Jan Dulac
On the eve of the Eurasian
Economic Union (EEU) summit, which took place on December 23in Moscow, Belarus
President Alexander Lukashenko lashed out at Russia’s policy, calling it “silly
and stupid.” His anger was at restrictions Moscow had imposed on certain
imports from his country, along with many other points of friction between the
two “brotherly” nations.
A few days earlier, Lukashenko
had ordered customs checkpoints to be reinstated on the Belarusian-Russian
border, and announced that bilateral trade would be carried out in U.S.
dollars. Chairman of the Party of Patriots of Kazakhstan, Gani Kassymov, in
turn, called on the government of Kazakhstan to “postpone the introduction of
the Eurasian Economic Union norms for a year, to a time Russia’s economic
situation recovers. Kazakhstan cannot maintain economic fraternity with Russia
following the latter’s economic collapse. The Russian crisis will deteriorate
the economic situation in Kazakhstan and Belarus.” Kazakhstan is already
feeling the chill: imports from Russia are now worth $17.7 billion, whilst
Kazakh exports are worth $5.8 billion (following a 21 percent decline in Kazakh
exports in the first half of 2014, compared to the same period in 2013).
All this seems bad enough, but
most experts and observers, let alone the public, have failed to focus on one
crucial point: the EEU won’t just allow the cross-border free flow of goods,
capital and labor; Belarus and Kazakhstan will now also be exposed to Russian
organized crime, penetrating the countries’ businesses and government
structures, which have hitherto been under the tight control of authoritarian
leaderships.
In Belarus, the common feeling
is that the streets and avenues of Minsk are clean and well-kept, medical
services are fine, and policemen are “real” – not like Russia’s bent cops. The
concern about what might happen may explain why Lukashenko, when faced with
Moscow’s ban on Belarusian meat and dairy products, bluntly questioned Putin’s
ability to fight “crooks feathering their nests” off bilateral trade. Or, he
assumed, perhaps Moscow was using a combination of politics, shady schemes and
“internal forces” as foreign policy instruments.
Astana has a lot to lose as well.
In spite of all the ups and downs of Kazakhstan’s transformation to a market
economy, the nation has risen 47th place on the World Bank’s Competitiveness
Index and 50th place in the Ease of Doing Business rating. Red tape is
consistently being cut, thanks to the effective implementation of the
e-government concept: Kazakhstan has climbed to 28th place in the UN
e-government ranking. Most importantly, the mindset of the majority of Kazakh
citizens is market-oriented. Kazakhstan’s entrepreneurs have already become
accustomed to working under more or less civilized rules. President Nursultan
Nazarbayev claims his nation is ranked among the world’s 20 most attractive
countries for foreign investment.
Russian organized crime groups
have long been known for taking advantage of economic and social crises and
reforms to increase their influence and wealth. And any initiatives by Russian
criminals to get in touch with their counterparts in Kazakhstan, to prepare the
ground for the common market, may well find that the soil is fertile. While
Kazakhstan gradually climbs the business and investment climate rankings, it is
making much slower progress in the fight against corruption – according to
Transparency International, the country ranked 126th in the Corruption Perceptions
Index in 2014, compared to 140th in 2013.
By Putin’s definition, a “fifth
column” means internal forces serving Western interests and undermining
stability in Russia. However, popular opinion is that Russian oligarchs, merged
with criminal groups, play the same role in advancing Moscow’s interests in its
near abroad, as in Ukraine. Nobel Laureate Paul Krugman’s observed that
“Putin’s Russia is an extreme version of crony capitalism, indeed, a
kleptocracy in which loyalists get to skim off vast sums for their personal
use.” Not surprisingly, then, many Belarusians and Kazakhs see and fear the
political consequences of the EEU, especially against the backdrop of the
Ukrainian crisis.
Jan Dulac is a freelance
writer, based in Astana, Kazakhstan.