Changes of the EAEC in 2016

The Eurasian Economic Commission (EEC) expects that significant changes will take place in the Eurasian Economic Union in 2016. The average level of inflation in the member states will drop by nearly half. According to projections of the ECE, in terms of maintaining a moderate rise of world prices in respect of commodity products, decline of GDP in the EAEC will be about 2.4% in 2015. However, the situation is forecast to be more positive in the future. An improvement of the dynamics in 2016-2017 is expected. Not very noticeable, but it is still overall stable economic growth. So, in 2016, GDP growth in the countries of the EAEC can reach 0.9%, and even about 1.3% in 2017. If in 2015 the consumer price index of the EAEC countries is expected to reach 14.5%, in 2016 it could almost be halved – 7.4%. In 2017 it could also slow down to a level of 5.3%. This means an improvement in real incomes and the value of consumer demand.

The lowering of prices of energy supplies due to the high dependence on revenues from their exports in some EAEC countries, as well as the consequences of the devaluation of the Russian ruble have had a significant impact on the slowdown in the economies of the EAEC in 2015, but some experts point out political and other problems for the EAEC.

Sergei Markov, Director General of the Center for Political Studies, says that external players, especially ‘‘dominant players such as the United States and the European Union, do not want to admit that we have a right to form our own economic union that includes such neighbors as Ukraine, Belarus and other countries friendly to us. They have a fear that this can form a new great country, and they will have to compete with it.’’

Markov considers that Eurasian integration should use the positive experience of Europeans at the time of forming of the European Union. ‘‘In addition to the Eurasian Union, there are other integration projects with claims, particularly the Shanghai Cooperation Organization. There is a huge difference between the Eurasian Union and the SCO in their subject area. The Eurasian Union is totally about economics, and a bit about politics. The SCO is fully about security. I remind you that it was created in order to prevent the victory of Islamist extremists in the face of the Taliban in the Ferghana Valley, as well as Central Asian countries. In order for China and Russia to help these countries together and to ensure normal, functioning, secular political regimes,’’ Markov says.

The expert doesn’t exclude India, Pakistan, possibly Iran, Turkey, and then maybe Mongolia and several other countries joining the SCO. It is possible that the SCO will form some Eurasian organization of the United Nations. In any case, economic projects aren't the main direction in the framework of the SCO, and that is no coincidence. I will explain the logic – the SCO pays little attention to economics. If the economy is to develop there, in particular the formation of a free trade area, it could lead to the expansion of Chinese businesses in these areas, and Chinese businesses could collide with Russian ones and even press them. This could worsen relations between China and Russia, as well as undermine the entire SCO itself, which was created only to maintain the stability of the secular, civilized, progressive regimes in Central Asia. So it seems to me that the ratio of the projects of Eurasian integration, and the confusion between them, must be unravelled. The task of the political elites is to explain clearly the state of things and the prospects