Marcus Booth in London -

Already one of the largest consumer markets globally, the Eurasian Economic Union (EEU) has been adversely affected by the Russian recession that followed Western sanctions and the drop in the oil price. Amidst the pressures on its largest member state, however, Timur Suleimenov, economic and financial policy minister at the Eurasian Economic Commission, still asserts that the Russian-led trade bloc is a good thing for everyone.

Speaking at a briefing on the EEU at the Royal United Services Institute in London on June 10, Suleimenov admitted that, “difficulties in any of the member states is not good for the union, especially if it involves a member as large and economically important as Russia.”

Following Moscow’s ban on imports of Western foodstuffs, any signs of friction between the member states of the EEU – Armenia, Belarus, Kazakhstan, Russia and soon Kyrgyzstan – were not apparent at the briefing, even amid suggestions that Russia’s counter-sanctions against the West are hurting Kazakhstan fiscally in particular. Suleimenov continually reiterated that all countries in the EEU are represented equally, before admitting that, “the customs regulations in the union are a bit out of date and do not follow the best guidelines” – an indication that an updated customs code may be needed to ensure the free-flow of goods within the union.

Focusing more on what he considered the major impacts of sanctions, Suleimenov, a former Kazakh deputy minister of economy and budget planning, said that: “One of the key effects is in the field of exchange rates, where the ruble has depreciated against both hard currencies, such as the euro and the dollar, but also against the currencies of all the member states, especially Kazakhstan,” and that, “all other members, except Kazakhstan, followed suit and depreciated their currencies. This was partly because of [Kazakhstan’s] own depreciation a year ago and partly because the ruble appreciated again to even up the goods markets.”

Looking beyond short-term hindrances affecting the EEU, Suleimenov outlined his belief that such setbacks will not deter interaction with states outside the bloc's current economic area. “We cooperate with pretty much any country, any entity and any international organisation that is willing to cooperate with us,” he said, emphasising to attendees that, “the economic integration project is very good for everyone. Not only for the countries of the union, not only for the businesses and people of the union, but for our economic partners throughout the world – east, west, south or north.”

A prominent question asked of the panel throughout discussions was one of competition, with Suleimenov having to reassure listeners that, “the ideology behind the Eurasian Economic Union is not competitive. We are not doing it to be a counterweight [to the European Union]; we’re doing it for the good of our people, our businesses and for our economies. Our view is mostly internal, we want to be better off within the union.”

This view was also shared by Erzhan Kazykhanov, ambassador of Kazakhstan to the UK, who emphasised that the EEU “does not mark a shift towards isolation… the aim is not to create barriers to the rest of the world, but to improve our cooperation with other member states of the union.”

The ambassador added that these goals align with those of his nation, in that “it is in keeping with Kazakhstan’s instinct to look outward not inward, we want more economic partnerships, not less. We believe integration brings the long-term stable environment needed to develop the economy, creating jobs and better living standards that our people need.”

Suleimenov was just as adamant that competition was not an issue from the east either, saying: “there is no competition between [China’s] proposed Silk Road Economic Belt and the Eurasian Economic Union, because they are different in their intentions and nature.” He added that the Eurasian Economic Commission, the executive body of the EEU based in Moscow, welcomes the construction of the Silk Road Economic Belt because, “without the Central Asian countries, Kazakhstan in particular, the Chinese project is going nowhere.”

Kazakhstan has ambitions of its own to be a top 30 income country by 2050, with the EEU offering the best chance of achieving this. However, while the government in Astana continues to praise the union, and all seems rosy in the public eye, there is no question that disputes are likely raging behind closed doors.