Kyrgyzstan looks to postpone Customs Union membership

By bne IntelliNews May 8, 2014

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Kyrgyzstan may delay joining the Russia-led Customs Union for a year, its prime minister announced on May 7. The country has been backpedaling on the plan for some time, but the worries of members and accession candidates have risen on the back of the crisis in Ukraine. 

Kyrgyz Prime Minister Dzhoomart Otorbayev cited the need to hold public hearings on the issue amid protests in the capital against the country's accession to the trade club, which currently includes Russia, Belarus and Kazakhstan. Armenia is set to join soon, having rejected in September a plan to sign an Association Agreement with the EU under pressure from Moscow.

Otorbayev told a news conference in Bishkek that the roadmap for Kyrgyzstan's accession to the Customs Union is still not ready, and that the government has called on member states for its accession to be postponed, according to RFE/RL. A Kyrgyz governmental delegation led by Deputy Economy Minister Danil Ibrayev is currently holding talks in Moscow.

"There are two or three issues remaining to be resolved in the roadmap. This is not a political but economic union," Otorbayev said according to Kabar news agency. "In late May, at the forthcoming summit in Astana, we should make a statement. Kyrgyzstan is a democratic country and we should take into account public opinion, but the government's position has already been defined."

Enthusiasm for the Russian-led project has waned this year. In particular, it appears countries have been rattled by Moscow's attempts to strong arm Ukraine into the club. 


Without the second largest economy in the CIS, the project looks hamstrung. Analysts have long been clear that aside from the direct geo-political concerns, the huge pressure applied by Russia to deter Ukraine's former president Viktor Yanukovych from signing a free trade pact with the EU in November was motivated by its need to save the idea of a wider Eurasian Economic Union (EEU)

The acceptance of a bailout deal from Moscow saw Yanukovych deposed by February. That in turn saw Russia annex Crimea and maintain the pressure on Kyiv that has Ukraine on the brink of all out civil war. As bne reported last month, recent events even have those countries that are already members looking over their shoulders. 

Indeed, it now looks like member states could refuse to sign a treaty to transform the Customs Union into the EEU by 2015 on schedule. The deal is penciled in for a summit in Astana in late May, but at meetings in Minsk last month, deepening disagreements over the project were exposed. 

Moscow is urging Belarus and Kazakhstan to forge ahead, saying they should sign the treaty, establish the economic union, and resolve issues later. However, both Minsk and Astana have objected to Russian pressure to rush things. 

"Some suggest implementing certain agreements in 10 years, that is by 2025, which sounds odd, to put it mildly," Belarusian President Alexander Lukashenko said at the Minsk summit. "If we are not ready to do it now, we should openly admit it."

Looking for reverse

If the current membership is worried, it's little surprise Kyrgyzstan is looking for reverse. The country has had cold feet over joining the Customs Union for some time, with senior officials insisting that it wants more say on the roadmap, accusing Russia of dictating terms.

To that end, Otorbayev promised on May 7 that after his government finalises the roadmap it will be offered to the public for discussion. RFE/RL reported on May 5 that dozens of activists from the NGOs opposing accession held a rally to protest government plans to take the country further into Russian orbit. They claim Kyrgyzstan's membership of the union will "restrict its political and economic independence".

Unlike Kazakhstan, which did not hold public hearings on the country's membership, Kyrgyzstan cannot afford to ignore public opinion. While Kazakhstan has a strong authoritarian system, Kyrgyzstan has seen two governments violently ousted in the past nine years.

At the same time, hundreds of thousands of Kyrgyz labour migrants to Russia and Kazakhstan would gain from the country's entry to the bloc, Otorbayev has pointed out. "The issue of improving the state of labour migrants is a priority," he said. According to the UNDP, remittances from Kyrgyz working abroad exceed $2bn a year, accounting for 31% of the country's GDP. However, Russia has spent the last couple of years clamping down on workers from Central Asia.

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