Vladimir Putin Asserts Russia’s Regional Economic Power

This Eurasian Customs Union is supposed to stretch from Belarus and Moldova to the Caucasus and Central Asia, thus recovering most of the former Soviet Union. For the time being, Moscow is using the traditional carrot and stick approach to prevent the former Soviet republics from joining the European Union.


By Nicholas Dima | October 16, 2013

Something strange is happening in the world this fall of Anno Domini 2013. The United States seems politically deadlocked. Europe is struggling both politically and economically and is not really functioning as a union. The Middle East has just stopped short of a new war. And Russia under the old and new President Vladimir Putin is reasserting itself as an international power.

Important events are in the offing, and Moscow is working feverishly to take full advantage of them. After decrying the dismantling of the Soviet Union and reinstating the Soviet anthem, Putin seems determined to reconstruct the former USSR into a Euro-Asian super state. This Eurasian Customs Union is supposed to stretch from Belarus and Moldova to the Caucasus and Central Asia, thus recovering most of the former Soviet Union. For the time being, Moscow is using the traditional carrot and stick approach to prevent the former Soviet republics from joining the European Union. And the timing is critical because the EU will meet next month for the third Eastern Partnership Summit in Vilnius to possibly grant associate status to several East European countries, as Lithuania, once in the Soviet orbit, presides over the EU.

The Economist of September 16 writes that since May of this year when Putin began his third term as President “his declared objective has been to launch a 21st century Russian resurgence.” And, he emphasized that “the threat to Russia over the past quarter century has come from the Western world, and specifically the USA. They are our geopolitical opponents.” As a consequence, Russia is now modernizing its military machine and is trying to reach for foreign allies. Interestingly, the new Chinese leader, Xi Jinping, made his first international trip in his capacity as General Secretary of the Communist Party of China, to Moscow and, according to the Economist, Russia and China participated this past July at the biggest naval exercises the two countries had ever held together in the Pacific.

Putin’s vision is a huge free-trade zone with a strong military alliance. The former Soviet republics are reluctant to join the new Russian sphere, but Moscow is hell-bent on bringing them to order. The key is first to co-opt Ukraine, but Kiev received Moscow’s plan with great reservations. Heavy handedly, Russia reacted by blocking its imports. The Kremlin’s pressure on Ukraine is an ongoing process, but not the only one.

On September 29 the Washington Post dedicated an editorial to the efforts of Moldova to join the EU and to Moscow’s fierce opposition to sabotage any EU-Moldova accords. For those who know the region and Russia’s position, the editorial does not offer many new elements. Yet, the article is important because it brings to the fore the deteriorating relations between Moscow and the West. With U.S. foreign policy in disarray, Putin is pressuring Moldova, Ukraine, Georgia, as well as the former Soviet Central Asia, to join the Eurasian Customs Union. In September, ahead of the Vilnius meeting, Moscow banned the importation of Moldovan wines (its biggest export); it threatened to cut its supply of natural gas; and, it began to harass and deport Moldovan guest workers. Putin’s Eurasian Customs Union has already attracted Belarus, Armenia, Kazakhstan, and likely other Central Asian republics. Tajikistan, for example, has already signed an accord to extend for another 30 years an important Russian military base on its territory in exchange for receiving natural gas and a good treatment for its migrant workers in Russia. Moscow’s economic pressure is aimed at preventing the former Soviet republics from any form of association with the EU. Such association could later lead to full membership in the EU and eventually to integration into NATO. If Moscow’s pressure over the larger and stronger Ukraine is subtle, its pressure over smaller and weaker Moldova is open and much harsher, depicting the tactics of a bully.

According to Mediafax and Romania Libera of September 26, as a response to Russia’s blackmail, the European Commission began to consider opening the EU’s market to Moldovan wines. Yet, the Russian news agency RIA Novotni, cited by Romania Libera, announced that President Putin warned Moldova if it signs an accord with the EU, it should not expect the Eurasian Customs Union will accept its wines. And he stressed that Russia, Ukraine, Belarus and Kazakhstan represent the biggest market for Moldova’s wines, therefore, Moldova should join. Furthermore, Russia’s Vice-Premier Dmitri Rogozin, came to Chisinau and cautioned Moldova if it signs the association agreement with the EU “it will lose Trans-Nistria, will freeze in the coming winter, and will become Europe’s servant.” All this time, the Russian leadership of the break-away region of Trans-Nistria is increasingly hostile toward the government of Moldova, <em reported on September 18.

The tug-of-war is over control and influence of the six countries – Belarus, Ukraine, Moldova, Georgia, Armenia and Azerbaijan – that comprise the Eastern Partnership. While the EU would like to attract them, Russia is doing everything to integrate them into its own union. Putin’s pressure to keep Ukraine under Moscow is more nuanced than in the case of Moldova, but is very firm. He claimed recently that the economic interests of Ukraine would be much better served if Kiev were to join the Eurasian Customs Union. Yet, he threatened Kiev with serious consequences if it signed an agreement with the EU. As a result, Ukraine is hesitant and is facing a dilemma. Its foreign minister declared Ukraine did not want to renounce the present agreements with Russia and expressed his hope that maintaining relations with both systems should be acceptable to all Ukraine’s partners. Nevertheless, Romania Libera reported on September 13 that the president of the European Commission, José Manuel Barroso, had made it clear that a country cannot belong to two different custom systems.

Then, at the 1,025th anniversary of Russian Christianity held in Kiev, Putin gathered most of the heads of the Eastern Orthodox Churches and stressed their spiritual unity. The gathering was attended by the leaders of Serbia, Bulgaria, Montenegro and Cyprus, where Russia would like to obtain a naval base, as its warm water Mediterranean port of Tartus in Syria is at risk. Although allegedly a religious gathering, it resembled more of a geopolitical meeting. Interestingly, Romania, primarily an Orthodox country, but a firm NATO member and a loyal American ally, was absent from the meeting. Bucharest cannot possibly forget the past Russian abuses of its lands and the alienation of its former province of Bessarabia, part of what is now the Republic of Moldova.

The big prize in Russia’s geopolitical-economic struggle for the domination of Eurasia is Ukraine. This is discussed in the article “Ukraine and Russia-Trading Insults,” in the Economist of August 24. Putin’s chief economic adviser, Sergei Glazyev, warned Kiev without going into details that associating itself with the EU at the coming Vilnius summit, would be “suicidal.” While Russia is actively promoting a clear-cut policy choice ahead of the Vilnius summit, Europe seems to be intimidated and has a tepid attitude, while the United States is mired in its own problems and is absent from this important European event.

On September 29, Carl Gershman, president of the National Endowment for Democracy (NED), writing in the Washington Post stressed that even the Russian journalists are aware Moscow is trying to blackmail its neighbors to coerce them into the Eurasian Customs Union. Yet, the Russian online newspaper Gazeta.ru wrote, “Blackmail is the worst possible way of advertising economic cooperation.” The journal added, “Russia’s problem is more than tactical. Its post-communist neighbors prefer the relative dynamism of Europe to Russia’s stagnant economy.” And the very title of the articles speaks volumes: “Former Soviet states stand up to Russia.” Will the U.S.?


Nicholas Dima, Ph.D., is a former professor and author of numerous books and articles including the autobiographical memoir, Journey to Freedom, a description of the effects of communist dictatorship on a nation, a family and an individual. He currently lectures and is a contributor to SFPPR News & Analysis.

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