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Uzbekistan suspends EurAsEC membership

11/24/2008

CENTRAL ASIA
Uzbekistan suspends EurAsEC membership
Approximately one month ago, Uzbekistan’s Ministry of Foreign Affairs submitted a letter from President Islom Karimov to the secretariat of the Eurasian Economic Community (EurAsEC) Integration Committee, informing EurAsEC officials that the Uzbek government had decided to suspend its membership in the organization.  EurAsEC was established in October 2000 by Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan; Uzbekistan did not join until January 2006. (1)  The organization is an outgrowth of the Commonwealth of Independent States (CIS) and generally is considered to be one more tool, which the Russian government can utilize to exert influence in the former Soviet republics – in EurAsEC’s original charter, the Russian Federation was allotted forty votes on the Interstate Council and Integration Committee, twice the amount of Kazakhstan and Belarus’ vote share, and four times that of Tajikistan and Kyrgyzstan.  These voting shares were apportioned based on members’ “respected prorated contributions to the Community Budget.” (2)

Although there has been much speculation about the reasons behind President Karimov’s decision, neither he nor the Uzbek foreign ministry has issued any statements explaining what, to the outside observer, would seem to be a sudden about-face on the direction of Uzbekistan’s foreign policy.  Since reactivating its membership in the Collective Security Treaty Organization (CSTO) in 2006, the Uzbek government has appeared to orient itself more toward Russia, while allowing its relations with the US and Western Europe to stagnate.  Russian companies have been granted a number of potentially lucrative gas and other business contracts in Uzbekistan and for the most part, Tashkent has not attempted to oppose the Putin-Medvedev regime’s policies in the “Near Abroad” or anywhere else.  However, now many are interpreting the EurAsEC suspension as a sign that President Karimov’s administration once again is willing to do business with Western companies and may be more receptive to the policies of the regimes they represent.

In fact, various experts and pundits have linked Karimov’s decision directly to the fact that in mid-October the European Union lifted the remainder of the sanctions that it had imposed against the Uzbek government following the 2005 civil unrest and bloodshed in Andijon.  Karimov’s letter to the EurAsEC committee was delivered only days after the EU announced its decision.  Many also consider Tashkent’s action to be a clear message and slap in the face for Moscow and likely only a harbinger of further rebuffs to come. (3)  One expert, Director of the Institute of CIS Countries Konstantin Zatulin, has predicted that, depending upon Russia’s reaction, the Uzbek government will choose to withdraw from the CSTO, as well. (4)

Mr. Zatulin’s assessment is consistent with the argument that views Karimov’s decision simply as the latest stratagem in his attempt to play Russia, the US and European Union against each other, in a bid to gain greater concessions from each one.  Based upon this line of reasoning, the Uzbek president’s next move will be dictated solely by the reactions of these three entities and whichever government reacts most favorably will win concessions from Tashkent.  Although Karimov’s positions on foreign and economic policy undoubtedly have been influenced by Russia and various Western administrations in the past, his latest action may be linked more closely to his regional aspirations than to his ambitions in the international arena.  By suspending Uzbekistan’s EurAsEC membership, the president has attained more independence and greater maneuverability for his administration in its regional relations.  Theoretically, at least, one of EurAsEC’s main goals is to increase trade and commerce between its member states; the organization’s founding charter calls for the establishment of a “Customs Union and Single Economic Space,” (5) which would require the signatories to commit to a free trade regime, agree on customs duties, simplify customs procedures and adopt unified legislation on the cross-border transfer of goods.  Anti-dumping and other protectionist trade policies would be abolished and eventually all customs controls within the free trade zone would be abrogated, allowing for the free movement of not only goods and capital, but of the workforce, as well. (6)

Although an agreement on the “Single Economic Space” was signed in 2003 (7) and Russia, Belarus and Kazakhstan finally formed a customs union this year, (8) few of EurAsEC’s other goals have been implemented – visa regimes and customs duties are still in place between the various Central Asian states and cross-border trade continues to be hampered by protectionist trade policies and complicated, lengthy, corruption-riddled customs procedures.  The Uzbek government has been one of the worst abusers of customs and trade policy in the region, repeatedly shutting down sections of its border with all four of its neighbors, restricting imports and exports of certain products, and planting landmines on the borders it shares with Tajikistan and Kyrgyzstan.  Citizens of other Central Asian states wishing to enter Uzbekistan to visit relatives or on business routinely face harassment and even verbal abuse from the border guards, who frequently demand bribes in return for allowing someone to pass across the border.  Based on the Uzbek government’s post-Soviet trade policy thus far, it seems fairly certain that the establishment of a free trade zone permitting the unfettered movement of both goods and people across Uzbekistan’s borders is precisely the opposite of what Karimov is striving to achieve.  The strictures that the imposition of such a regime could impose would severely limit Tashkent’s ability to wield its customs and trade policies as a weapon in defense of its own oppressive economic and social practices.

To date, the EurAsEC signatories primarily have ignored the aims set out by the body’s charter, however, for the past year, the Russian and Kazakh governments once again have begun pursuing the organization’s goals with a bit more enthusiasm, as evidenced by their decision to form the customs union called for in the EurAsEC’s charter.  Their decision apparently rankled with the Uzbek president: an unnamed source in Russia’s foreign ministry told Kommersant correspondents that Karimov resented the fact that his country was not included in the customs union’s formation.  The source also stated that “…I can say that the Uzbek leadership recently has criticized YevrAzES [Russian acronym for EurAsEC] repeatedly, saying the organization is ineffective. Karimov even said it should merge with the CSTO.” (8) The Uzbek president’s dissatisfaction may stem from more than just a sense of having been slighted at being left out of the customs union – in fact, his disgruntlement actually may mask dismay at the fact that the notion of establishing a free trade zone seems to have found new life.  Furthermore, his alleged desire to fold EurAsEC into the CSTO could be part of a strategy to transform the organization into a more security-oriented entity and eliminate the bulk of its economic goals, particularly those which would require Uzbekistan to open its borders to regional commerce.

For most of its post-Soviet history, the Uzbek government has hewn its own path regarding trade and economic policy and has eschewed any regional or international cooperation that would require ceding even a modicum of control over its own borders.  President Karimov generally is not viewed as a “team player,” unless he is the one leading the team and dictating all of its actions, according to his own interests.  He may have hoped that by rejoining the CSTO and entering EurAsEC, Uzbekistan finally would be granted a clear leadership role in Central Asia’s regional affairs.  Not only have these expectations remained unfulfilled, but Kazakhstan, Russia and Belarus’ recent action has reactivated the specter of the free trade zone, a concept which threatens the Uzbek government’s command over its cross-border traffic, as well as its ability to protect and isolate its markets from regional competition.  As a wholly independent player, outside EurAsEC, Karimov will have complete latitude to make bilateral trade deals with his neighbors, based on what most benefits both himself and his administration.  He also retains the right to use Uzbekistan’s customs and trade policies as instruments of coercion against neighboring countries, a license that he seems to hold especially dear.

Source Notes:
(1) “Eurasian Economic Community confirms Uzbekistan suspends membership,” 12 Nov 08, Interfax; OSC Translated Text via World News Connection.
(2) “AGREEMENT ON FOUNDATION OF EURASIAN ECONOMIC COMMUNITY (EAEC),” Article Thirteen, WorldTradeLaw.net via <http://www.worldtradelaw.net/fta/agreements/eaecfta.pdf> accessed 20 Nov 08.
(3) Mikhail Zygar and Vladimir Solovyev, “Uzbekistan Withdrawing from Eurasian Economic Community,” 17 Nov 08, Kommersant; OSC Translated Text via World News Connection.
(4) “Uzbekistan could quit CSTO after leaving EurAsEc – expert,” 16 Nov 08, Central Asia General Newswire; Interfax via Lexis-Nexis Academic.
(5) “AGREEMENT ON FOUNDATION OF EURASIAN ECONOMIC COMMUNITY (EAEC),” WorldTradeLaw.net, Ibid.
(6) “Single economic space agreement signed,” 19 Sep 03, RosBusinessConsulting via The Russia Journal Archives 1999-2005 via <http://www.russiajournal.com/node/16351> accessed 20 Nov 08.
(7) Ibid.
(8) “Uzbekistan Withdrawing from Eurasian Economic Community,” 17 Nov 08, Kommersant, Ibid.

By Monika Shepherd (moshep@bu.edu)

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