Central Asia states press ahead with moves to join Customs Union

By bne IntelliNews November 13, 2013

bne -

Kyrgyzstan and Armenia are to accelerate their move towards membership of the Russian-led Customs Union, a Kremlin official said on November 12, while Uzbekistan expressed its first interest in joining the Eurasian trade club. The news comes as Moscow races to convince several former Soviet states that their destiny lies toward the east rather than the west.

Kyrgyzstan and Armenia are set to agree roadmaps for their accession to the Customs Union before the end of 2013. Russian presidential advisor Sergey Glazyev said on November 12, according to RIA Novosti. The same day, a senior Uzbek official said Tashkent is "positively disposed" towards membership.

Moscow has been keen to swell membership of the bloc - in which Russia is currently joined by Belarus and Kazakhstan - as it bids to deter Kyiv from signing an association and trade pact with the EU on November 28. Moldova and Georgia are also expected to sign preliminary agreements with Brussels at a summit hosted by Lithuania.

Kyrgyzstan's roadmap for entry is expected to be completed by the end of the year, Glazyev said. Armenia, which was also set to sign up with the EU before it made the shock announcement in September that it will join the Russian-led alliance, is expected to complete the process even more quickly. The roadmap for Yerevan is now due to be developed by the end of November.

Kyrgyzstan was the first country aside from the three founders to express an interest in joining the Customs Union, which was launched in 2010. Kazakh President Nursultan Nazarbayev announced on May 29 that the small Central Asian state is on track to become the fourth member of the Customs Union on January 1, 2015.

Meanwhile, in Yerevan, following a summit meeting with Russian counterpart Vladimir Putin on September 3, Armenian President Serzh Sargsyan annoiunced his country also intends to join. The decision followed pressure from Russia, including a steep increase in gas export prices. However, Moscow almost instantly dropped export tariffs following the announcement, and Armenia has since benefited from soft loans to update infrastructure.

While the jury is out on whether such carrots will be enough to bring Ukraine - seen as a lynchpin for the Russian project - back in from the cold, they clearly have lips licking amongst Central Asia's other authoritarian regimes. Despite the often troubled relationship between Tashkent and Moscow, Uzbekistan is the latest from the region to express its interest in the Customs Union.

Speaking at a press conference after a meeting with his Russian counterpart in Tashkent, Uzbekistan's Senate speaker, Ilgizar Sobirov, said the Uzbek government is "positively disposed" towards joining the Customs Union launched by Russia, Belarus and Kazakhstan, RIA Novosti reports.

Russian Senate speaker Valentina Matviyenko told journalists that she had seen some interest from Uzbekistan in the Customs Union but warned that, contrary to events in the neighbourhood, progress would be slow. "There is no need to hurry, there is no need to pressure anybody," she said. "Every country is sovereign, it can decide what is beneficial and in the interests of its government and its people."

That delay is likely the result of ongoing tension. Uzbekistan has for many years resisted full participation in economic and military regional alliances, in particular those dominated by Russia. It quit the Collective Security Treaty Organization, a military grouping of post-Soviet countries, in 2012.

Meanwhile, Russian investors are under extreme pressure in Uzbekistan; a trend that has been linked to the power struggle amongst the Uzbek elite regarding succession of President Islam Karimov. Russian telecom MTS was forced out of the market last year, and compatriot Vimplecom is now reported to be facing mounting pressure.

That didn't prevent Sobirov promising Uzbekistan will create conditions to attract Russian investors. However, the two countries need to revise economic and business agreements, he added.

A recent survey by the Eurasian Development Bank showed that 77% of Uzbek citizens favour Customs Union membership - a higher proportion than in the existing member states and any other Central Asian country. Kazakhstan and Russia are Uzbekistan's main trading partners.

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