In a lengthy newspaper piece published in early October, Russian Prime Minister Vladimir Putin unexpectedly called on the former Soviet republics to join Moscow and create a Eurasian Union. Russia is already consolidating its recently formed Customs Union with Belarus and Kazakhstan. Now the intent seems to be to expand the number of its members as well as to enlarge its functions and powers into something like the European Union. But major obstacles stand in the way of Putin’s project, and the prospects of a new Eurasian Union emerging anytime soon in the former Soviet Union are small.

BACKGROUND: Putin offered his proposal to create a Eurasian Union in a lengthy article in the Russian newspaper Izvestia. His vision is that the former Soviet republics would coordinate their foreign, economic, and other policies – presumably under Moscow’s leadership – to enhance their (i.e., Moscow’s) global influence. Putin disclaimed any intent to recreate the Soviet Union, noting that “it would be naive to try to restore or copy something that belongs to the past.” But Putin added that “a close integration based on new values and economic and political foundation is a demand of the present time.” Putin called for building on the valuable “inheritance from the Soviet Union,” which he described as infrastructure, specialized production facilities, and a common linguistic, scientific and cultural space,” in pursuit of the “joint interests” of the former Soviet republics. Putin further wrote that his goal was “an ambitious task of reaching a new, higher level of integration” and creating “a powerful supranational union capable of becoming one of the poles in the modern world.” He compared his proposed union with “other key players and regional structures, such as the European Union, the United States, China and the Asia Pacific Economic Community.”

Putin made his proposal shortly after declaring his intent to return to the Russian presidency. Putin’s Press Secretary Dmitry Peskov told Kommersant that the Eurasian Union would be one of his “key priorities” during his next term as president.

In a nationwide television speech in April 2005, Putin famously described the collapse of the USSR as one of the greatest geopolitical catastrophes of the 20th century. In his previous two terms as president, Putin had made reestablishing Moscow’s influence in the former Soviet Union a priority. After failing to revitalize the Commonwealth of Independent States (CIS), Putin launched a sustained campaign to enhance cooperation among a core group of pro-Russian governments. In the security realm, this effort lead to the formation of the Collective Security Treaty Organization (CSTO), which under the leadership of a former Russian General has been developing collective peacekeeping and rapid reaction forces designed to protect its members from diverse threats.

In the economic realm, this effort led to the formation of a Eurasian Economic Community (Eurasec) that sought to promote economic and trade ties among countries that formed a unified economic system during the Soviet period by reducing custom tariffs, taxes, duties, and other factors impeding economic exchanges among them. Its stated objectives include creating a free trade zone, a common system of external tariffs, coordinating members’ relations with the World Trade Organization (WTO) and other international economic organizations, promoting uniform transportation networks and a common energy market, harmonizing national education and legal systems, and advancing members’ social, economic, cultural, and scientific development and cooperation.

With its smaller number of members, all favorably disposed toward Moscow’s leadership, Eurasec (like the CSTO) represented a logical alternative to the more unwieldy and contentious CIS. But integration efforts within Eurasec soon also lost steam and failed to create effective multinational regulatory bodies. The members’ diverging status with respect to the WTO was a major factor complicating integration initiatives. Only Kazakhstan, Belarus, and Russia decided to form the current Customs Union.

IMPLICATIONS: The prospects of a Eurasian Union in the near future seem unlikely. It has taken the Russian Federation a decade to launch its Customs Union with the limited membership of Belarus and Kazakhstan, whose single economic zone will not take effect until the beginning of next year. It is hard to imagine a wider and deeper EU-type grouping emerging in the former Soviet Union anytime soon.

Policy differences among CIS members have repeatedly undermined the viability of the Moscow-backed multinational institutions in the former Soviet Union. For example, the former Soviet republics have disagreed over the appropriate prices for Russian energy and Russia’s restrictions on labor mobility. Plans to establish a free trade zone have repeatedly been postponed due to the disparities among its members in terms of economic policies and attributes. Many of the former Soviet republics trade more with European or Asian countries than they do with each other. Similar divergences are evident in the desire of some members to move closer to seemingly rival Western institutions like the European Union and NATO. The wave of color revolutions a few years ago has widened divergences among the members’ political systems, with certain countries seeking to establish European-style liberal democracies and other regimes committed to preserving their authoritarian status quo.

If Putin genuinely envisions a European Union-type alignment as a model, it would imply the need to create a single currency and an independent bureaucracy to administer and enforce the agreed rules and common economic policies. The different growth rates and other economic characteristics of the member states will prove as disruptive to the proposed Eurasian Union as it has been in the European Union. There are also serious rivalries among former Soviet republics for regional leadership – such as that between Kazakhstan and Uzbekistan – that will likely act as an impediment to the establishment of joint economic and other policies.

Furthermore, Putin’s proposed Eurasian Union faces serious competition from the existing multinational institutions currently operating in the former Soviet space. Putin’s team has said that the Eurasian Union will not duplicate or replace existing collective bodies. But it is unclear, then, how the Eurasian Union would work with or around the other structures.

The two most serious competitors are Shanghai Cooperation Organization (SCO) and the European Union (EU). Both institutions have the advantages of not being dominated by Moscow, and many of the other former Soviet republics are eager to develop their relations with China or the West to balance their ties with Russia. The SCO, now chaired by China, seeks to expand its economic, security, and other activities in the same functional areas as the proposed Eurasian Union. Meanwhile, the European Union has recently strengthened its outreach efforts in the former Soviet republics. Although full membership is excluded, the EU can still offer considerable economic and other incentives. It is unsurprising that many in Beijing and Brussels interpret Putin’s plan as an attempt to displace their influence.

Perhaps the most significant obstacle is that many of the former Soviet republics have serious reservations about forming any sort of alignment with Moscow given their unhappy history of Soviet and Russian domination. The former Soviet republics, even those whose leaders did not initially seek independence, jealously guard their sovereignty and autonomy. In Central Asia, only Kazakhstan’s government endorsed Putin’s proposal. President Nazarbayev called creating a Eurasian Union “a very relevant project” for managing 21st century challenges. As Robert M. Cutler noted in the 10/19/2011 issue of the CACI Analyst, Nazarbayev has been advocating a Eurasian Union for decades.

In contrast, the governments of Moldova and Georgia are negotiating free trade agreements with the EU, while Armenia and Azerbaijan might soon follow them. The new government of Kyrgyzstan might want to please Moscow by supporting the Eurasian Union, but this could hurt Kyrgyzstan’s imports of Chinese goods and desire to secure Chinese investment.

In his appearance at a recent CACI forum, Minister Mamadaminov said that, while Tajikistan might consider joining the Russia-Kazakhstan-Belarus Customs Union in the future, and perhaps a Eurasian Union after that, his government’s priority was to enter the World Trade Organization. Meanwhile, leading politicians in Tajikistan dismissed Putin’s proposal as pre-election demagogy designed to appeal to Russian nationalists.

CONCLUSIONS: To overcome these centrifugal tendencies, Russia must become a more attractive partner. In principle, Moscow could garner more support for its integration programs by sharing more influence within collective institutions and adopting a more conciliatory approach on disputes with its neighbors. In practice, Russia must also achieve greater success in its domestic modernization and other reform efforts to become a more attractive economic partner that could trade with these countries and generate mutual investment.

AUTHOR’S BIO: Richard Weitz is Senior Fellow and Director of the Center for Political-Military Analysis at the Hudson Institute. He is the author, among other works, of Kazakhstan and the New International Politics of Eurasia (Central Asia-Caucasus Institute, 2008).