Home Eurasia Holding-Together Regionalism: 20 Years of Post-Soviet Integration

Holding-Together Regionalism: 20 Years of Post-Soviet Integration

Libman A., Vinokurov E. (2012) Holding-Together Integration: 20 Years of the Post-Soviet Integration. London and New York: Palgrave Macmillan.

Within a single generation, the post-Soviet political, economic, and social landscape has changed immensely. The new structures – ranging from national power structures to a completely new economic reality based on the market instead of centralized planning – have come into existence. As 20 years have passed since the break-up of the Soviet Union, it seems timely to provide an overview, analysis and explanation of one of the most important and complex issues of the post-Soviet era, namely the (re-)integration of this highly interconnected region.

Offering a purely descriptive analysis of post-Soviet integration would, we feel, be too restrictive. Although we provide an overview here of political and economic developments over the last 20 years, the developments in the post-Soviet area demand an explanation. Why has post-Soviet integration been, on the whole, unsuccessful over the last two decades? Why did we have to wait almost 20 years for the first successful integration project, the ‘Troika’ Customs Union, to materialize? How can certain trends related to shared infrastructure, mutual trade and investment be explained? There are some exciting questions for the future, for example, what are the prospects and driving forces for the next 20 years? What is more desirable – an intensification or broadening of the Custom Union and the Common Economic Space? What is the optimal relationship between post-Soviet integration and the drive towards closer cooperation with the European Union and East and South Asia (that is, essentially, Eurasian integration)?  These are just a few of the questions which we address within the theoretical framework of what we refer to as “holding-together integration”.

Objectives of the book

Within a single generation, the post-Soviet political, economic, and social landscape has changed immensely. The new structures – ranging from national power structures to a completely new economic reality based on the market instead of centralized planning – have come into existence. As 20 years have passed since the break-up of the Soviet Union in 1991, it seems timely to provide an overview, analysis and explanation of one of the most important and complex issues of the post-Soviet era, namely the (re-)integration of this highly interconnected region.

Offering a purely descriptive analysis of post-Soviet integration would, we feel, be too restrictive. Although we provide an overview here of political and economic developments over the last 20 years (both in the text and in the chronology in Appendix 2), the developments in the post-Soviet area demand an explanation. Why has post-Soviet integration been, on the whole, unsuccessful over the last two decades? Why did we have to wait almost 20 years for the first successful integration project, the ‘Troika’ Customs Union, to materialize? How can certain trends related to shared infrastructure, mutual trade and investment be explained?

There are some exciting questions for the future, for example, what are the prospects and driving forces for the next 20 years? What is more desirable – an intensification or broadening of the Custom Union and the Common Economic Space? What is the optimal relationship between post-Soviet integration and the drive towards closer cooperation with the European Union and East and South Asia (that is, essentially, Eurasian integration)?

These are just a few of the questions which we address within the theoretical framework of what we refer to as “holding-together integration”, which merits a short introduction. The literature on regional integration in economics, political sciences and international relations is extensive, and has been continuously growing for at least six decades. To date, it has produced a wealth of theories and substantial empirical evidence regarding the dynamics of regional integration initiatives. However, this extensive and highly heterogeneous literature has a particular feature in common – it assumes a particular pattern for emerging regionalism: regional integration is pursued by a group of countries which, though independent, intend to strengthen their economic and political ties. However, while this is exactly what one observes in the two most successful regional integration projects – the European Union and the NAFTA – this coming-together scenario does not account for the huge variation in regional integration trajectories. The aim of this book is to examine the alternative context of what one could call a holding-together regionalism: the integration of countries, which until recently were part of a single political entity.

 In fact, many regional integration groups in developing countries are formed by territories originally belonging to a single empire. Formal and informal commonwealths uniting the metropolitan power with its former colonies have also had, it has been argued, a substantial impact on the modern world. The aim of this book is to study one of the high-profile examples of regional integration emerging after the collapse of a previously unified political entity and based on the efforts of various newly independent states to maintain a certain level of cooperation – post-Soviet regionalism.

In spite of huge debate on the determinants and outcomes of political and economic transformation in the post-Soviet space, which was particularly prevalent in the 1990s and somewhat diminished in the 2000s, there are very few studies dealing with the empirical analysis of post-Soviet regionalism. The reasons for this lack of attention seem to be straightforward: it is well known that most post-Soviet integration projects, starting with the Commonwealth of Independent States (CIS), were ineffective: the economic integration of post-Soviet countries remained at a lower level than under the USSR.

However, two important changes have recently brought this perception into doubt. Firstly, in the second half of the 2000s, Russia re-emerged as a powerful force in central Eurasia, and post-Soviet integration became an important component of Russian foreign economic affairs and foreign policy in the region. It is therefore necessary to try and ascertain what effect post-Soviet regionalism could have had beyond the frequently discussed market integration and common regulatory standards. Secondly, in 2010, three post-Soviet countries launched a new integration agreement – the Customs Union (CU) of Russia, Belarus and Kazakhstan – which, unlike most of its predecessors, seems to be a well-functioning organization and one that is likely to affect trade relations in Eurasia. These three countries are also moving rapidly towards the formation of a Common Economic Space (CES), starting in 2012 with the first 17 substantive agreements on a wide range of issues, including the coordination of macroeconomic policy, unrestricted access to different types of infrastructure, common acquision rules and antitrust regulations, common policy on migrant labour, and so on. In parallel, the Customs Union Commission has actually become the first institution in the post-Soviet area with truly supranational powers. Moreover, progression towards more extensive economic integration will include the creation of the Eurasian Economic Union (EEU, ‘Evraziyskiy Ekonomicheskiy Soyuz’) which would present a ‘codified common economic space’ where the jumbled assortment of more than one hundred agreements of the CU and the CES will be codified and systematized. Another more distant goal, given the consensus required, is a common currency.

This book reviews the processes of economic and political integration in the former Soviet Union, providing an account of intergovernmental relations and economic ties between companies and households. We attempt to cover systematically all the main aspects of interdependency between the post-Soviet countries: trade, investment, shared transport, electricity and telecoms infrastructures, labour migration and financial markets.This volume thus endeavours to summarize the experience of 20 years of effort to (re-)integrate the post-Soviet space. However, we go beyond a simple descriptive examination of integration in the former Soviet Union (FSU) and aim rather to use the post-Soviet space as a case study to generate predictions regarding the specific aspects of holding-together regionalism vis-à-vis other modes of developing regionalism. We focus on three perspectives: the advantages and disadvantages of formal regional integration in the post-Soviet space (the different agreements created by the FSU countries and their comparative efficacy); the interaction between public policy and cooperation in the countries and the real economic links maintained and established by them; and the potential for post-Soviet ‘holding-together regionalism’ to be transformed into ‘coming-together regionalism’ in a broader Eurasian context.

 … This book is divided into four parts. In the first part we clarify the concept of ‘holding-together regionalism’and attempt to provide examples of this type of regional integration worldwide. From this we generate a number of hypotheses regarding the dynamics of holding-together regionalism as opposed to coming-together regionalism.

The second part of the book looks back at the evolution of post-Soviet regional integration. It starts by providing an account of formal intergovernmental integration and informal links at the micro-level between post-Soviet states, as well as their outcomes in terms of market integration and economic convergence. We move on to what could be described as the political economy of post-Soviet regional integration: the structure of incentives of major players that have generated the outcomes empirically observed in the region. We conclude by providing a brief overview of the role of sub-national actors in regional integration in the FSU.

The third part of the book offers a detailed analysis of key areas of interaction in the FSU: from trade and investment to interaction in specific areas of infrastructure. Our aim is to understand the variations in the sectoral dynamics of regionalism and regionalization.

The final part of the book examines the links between the post-Soviet space and other parts of Eurasia from two viewpoints: the extent of actual economic interaction between the FSU countries and the objectives of their foreign policy.

The Appendices at the end of the book contain macroeconomic data on CIS countries and a concise chronology of post-Soviet integration from 1991-2010, highlighting the most significant developments.

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