Customs Union of Former Soviet Nations Fails Due to Total Absence of Mutual Trust

The post-Soviet integration and cooperation initiatives have an extremely unsuccessful track record. It seems that the problems persist. Recently, the very idea of Customs Union between Belarus, Russian Federation and Kazakhstan had been questioned, after the government of Belarus made clear its intent to insist on more tariffs exemptions, especially concerning Russian raw oil exported to Belarus.

These exemptions are vital for the Belarusian economy which in 1990s and 2000s immensely profited on refining imported oil selling the end products to Western Europe. By importing cheap Russian oil Belarus kept its refineries in Navapolack and Mazyr busy and very profitable. It also worked well for Russia which lacks refineries and other processing facilities.

But recently Moscow decided to stop this enrichment of Belarus and while insisting on 'customs union', excluded oil and oil products from its coverage. Belarus is expected to pay full tariffs. Yet cheap oil was that only benefit which made the idea of customs union with Russia and Kazakhstan, known as the world's major oil- and gas exporters, interesting for industrially developed Belarus.

As Minsk-based economist Siarhiej Chaly put it,

'Customs Union' in its present shape, including two identically raw materials-based economies oriented at selling energy resources and buying consumer goods, does make sense. But only for these two economies, however. In essence it is merely a protectionist agreement.

Siarhiej Chaly is sure, Belarus has no interest in entering such association. The Belarusian officials, including deputy prime minister Siamashka now express the same opinion ever more explicitly.

Is Moscow facing one more failure in its attempts to collect its 'lost lands'? If Minsk will not comply with Russian wishes on the Customs Union it means a setback for ambitions harbored by a significant part of Russian elites, including Russian prime-minister Putin. Of course, the Kremlin can continue the whole enterprise with sole Kazakhstan. Yet, in this case Moscow shall wait until 2012 as agreed with Kazakhstan president Nazarbayev. More cooperative Lukashenka could be a symbolic geopolitical victory for the Russian leadership which is important to Russian public opinion eager to see restoration of 'national greatness'. Some observers speculate that such integration project could quite intentionally serve to show the wider audience in Russia an illusion of Soviet Union revival for the next presidential campaign of Vladimir Putin.

Meanwhile, there are two other conclusions to be drawn from the Customs Union. First, the integration of Belarus and Russia and their so-called 'Union State' has been endlessly discussed and propagated in public and media, but it remains only a spin matter, since the countries did not even reach the level of customs union. Moreover, conditions of oil shipments to Belarus proposed by Russia this time are worse than those for China.

Second, the whole set of post-Soviet integration initiatives so far have pitifully failed, and it is true both for projects with Russian involvement and without it. The reason seems to be common and basic lack of trust in relations between post-Soviet nations. Without confidence in their partners, former Soviet republics see all integration enterprises as either formalist nonsense or a way to promote other ends which run contrary to integration.

The only examples of successful integration embracing post-Soviet countries are the EU and NATO. Even Baltic countries did not manage to get along well enough to abolish borders or create common currency between themselves until they joined European Union.



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