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Even Vladimir Putin's Authoritarian Allies Are Fed Up With Russia's Crumbling Economy

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To get a sense of why the world this month welcomed the Eurasian Economic Union with such resounding silence, look back to late August. As his country began its ongoing march into economic crumble, Russian President Vladimir Putin fielded a question at the Seliger Youth Camp. A young woman wanted the president’s thoughts on the geopolitical turbulence surrounding Russia—not from the Russia-backed separatists scorching eastern Ukraine, but from apparently ignorant Kazakhs to the south. Noting that the Kazakhs were not “correctly understanding Russian political rhetoric” and that Kazakhstan President Nursultan Nazarbayev was the most important “restraining factor” keeping ostensible Kazakh nationalism at bay, the woman asked Putin if she and her compatriots could expect “a Ukrainian scenario if Nazarbayev leaves the post of president.”

Putin answered her question, in a way. He didn’t deny the claim of a surge of anti-Russian sentiment in Kazakhstan, rhetoric redolent of Russia’s rationale for invading Ukraine. Rather, he offered an unprompted observation—a sort of geopolitical chauvinism dressed in impartial opinion. Prior to 1991, the president said, “Kazakhs had never had statehood.”

The response out of Kazakhstan didn’t take long. Nazarbayev—an aging autocrat, the only president independent Kazakhstan has ever known—promptly announced that Kazakhstan would spend 2015 celebrating the 550th anniversary of Kazakh statehood, harking back to the founding of the original Kazakh Khanate. (Not quite the 24th birthday Putin had posited.) After watching Russia bludgeon Ukraine under the faulty auspices of protecting those who spoke Russian, and after watching Moscow outright annex territory its leadership considered lost land, Kazakhstan has begun showing signs of defiance. Concomitantly, its relations with Russia have soured more drastically than any time since the fall of the USSR.

This tailspin is but one reason the Eurasian Economic Union (EEU), officially unveiled at the beginning of January, arrived with a hush exceeded only by disappointment and intra-union strain. Founded by a trio of strongmen known more for hyper-masculine tendencies than any willingness to cooperate, the EEU has proven heavy on tension and testosterone, light on achievement. Instead of fostering post-Soviet integration, Putin attempted to use the EEU to formalize Russian hegemony. And instead of any of the neo-imperial success he’d imagined, Putin has found only forced smiles, gutted treaties, and empty tables hosting autocrats who make it clear they’d rather be anywhere else.

When Nazarbayev first proposed the Eurasian Union in 1994, the president envisioned a marriage of equals—more European Union, less Soviet (Re-)Union. Putin picked up the idea, and formalized his dream of a Eurasian Union in a 2011 op-ed. Growing out of a Customs Union between Belarus, Kazakhstan, and Russia, the Eurasian Union was going to return Moscow to the great power stature it enjoyed before the USSR’s collapse. This would be Putin’s grand foreign policy project, surpassing anything he’d yet attempted. The Eurasian Union, he staked, was going to be a new geopolitical “pole.” Its unveiling would herald a new “epoch.” Neither West nor East, but a Eurasian third way.

For a while, it seemed like the EEU may actually carry its weight. Unlike other empty post-Soviet groupings—generally providing photo-ops, back-slaps, and little else—the EEU looked capable of action. Scores of technocrats came aboard to draft economic proposals. Moscow quelled concerns about sovereignty, pledging that all voices would be heard equally. Ministers from the three founding members all said the right things, made the right moves, played the right parts. Even after Ukraine collapsed into revolution—EuroMaidan vetoing former President Viktor Yanukovych’s overtures at joining Putin’s union—the EEU pushed ahead, determined to carry on without Kiev’s markets or manufacturing.

Then, last February, little green men began cropping up on Crimea’s corners, unofficial Russian forces who encircled airports and disappeared human rights activists and Ukrainian patriots alike. Rabid Russian nationalists ransacked the peninsula’s parliament. Nationalism surged, and the Kremlin decided that international treaties signed prior could be ignored as Moscow wished. Before the geopolitical vertigo could subside, Crimea was part of Russia.

At that moment, the Eurasian Union was doomed. Though Putin seemed unaware, the annexation resulted in a Pyrrhic trade—a land-grab for a peninsula in lieu of a new geopolitical pole; Crimea for an economic union of 170 million people. The curtains of neo-imperialism drew back, and Putinism was unveiled for what it was, neighbors and plans and pledges be damned. “The decision to annex Crimea changed everything,” Luca Anceschi, a lecturer in Central Asian Studies at the University of Glasgow, told me. Suddenly, the Eurasian Union was “kind of like a party where no one wants to be, like one of those awful family lunches.”

As the fallout from Russia’s Ukrainian misadventures continued—as sanctions expanded from Putin’s inner circle to the banks and industries related; as Russian-backed forces almost certainly slaughtered 298 innocents in a Malaysian airliner over the fields of eastern Ukraine—the Eurasian Union disintegrated brick by brick. The economics of the grouping had always favored Russia, acceptable enough so long as Moscow remained in fiscal health. But as sanctions compounded the pain of plunging oil prices, economic amity crumbled. Russian business had already begun swamping local Kazakhstani commerce, and membership had already delayed Kazakhstan’s accession to the World Trade Organization. But as Russia’s economy cratered—and as the Kremlin showed, time and again, no signs of economic salience whatsoever—Nazarbayev slammed Moscow’s position, noting that the “greatest risk” to the Eurasian Union came not from external Western sanctions but from Russian businesses smothering local industry. All the while, trade between Kazakhstan and the Russia-Belarus tandem flopped nearly 20 percent during 2014.

Belarus likewise confronted Russia's blinkered economic policies. After the Kremlin enacted counter-sanctions last year, barring the import of numerous Western items, Belarus began a nifty operation of repackaging certain goods before shuttling them across the border. (Belarusian oysters, anyone?) Russia caught on and tried to stem the flow of tuna and shrimp from the landlocked nation. In retaliation, Belarusian President Aleksander Lukashenko reinstated customs checkpoints along the Russian border—effectively nullifying the very purpose of a customs union. Making sure to drive the point home, Lukashenko added that Russia’s counter-sanction policy was “stupid and brainless,” and that his country wasn’t full of “puppies to be taken on a leash.”

Remarkably, as the union expanded, it managed to weaken itself even further. Armenia joined in early January—despite the fact that regulations expressly prohibit countries without contiguous borders from signing on—but opted not to employ customs checkpoints alongside Nagorno-Karabakh, the Armenian-occupied swath within Azerbaijan. Another recruit, Kyrgyzstan, shows little interest in enforcing new regulations along its border with China that could cut into a re-export trade worth some 30 percent of Kyrgyzstan's GDP. "We must prepare for the worst," Kyrgyzstan’s prime minister said of joining the Eurasian Union. Added the country’s president, “No offense, but we’re choosing the lesser of two evils. We have no other option.” The enthusiasm, it appears, is contagious.

As problems piled, Kazakhstan and Belarus did all they could to counteract any effects the Eurasian Union would have. The Kremlin’s plans for a Eurasian parliament, a Eurasian passport, and a common Eurasian defense security all fell apart. Russian officials have continued plugging a common currency and the intra-union removal of dollars and euros—necessary moves, one Russian official claimed, because “the collapse of the U.S. economy could not be ruled out.” Lukashenko’s response? All trade between Belarus and Russia would now be conducted solely in dollars and euros.

And the specter of nationalism swells with each month. Northern Kazakhstan boasts one of the largest stretches of ethnic Russian populations outside Russia, and has a distinct history of separatism predating Putin’s irredentism. (An ethnic Russian friend living in the area recently told me that he viewed his country as a “Bantustan”—full of people who, if not for Moscow's colonization, would still be illiterate nomads.) Anti-Eurasian Union forces have taken a distinctly ethnic hue in Kazakhstan, with ethnic Kazakhs leading the charges against joining. As Nazarbayev recently noted in the run-up to celebrations for the Kazakh state’s, uh, 550th anniversary, the country’s ancestors “call[ed] to every Kazakh”—not Kazakhstani, but ethnic Kazakh specifically—“to choose defending Kazakhstan to the last drop of blood.”

Instead of spending 2015 celebrating a union 20 years in the making, Kazakhstan will spend the year touting an ancient statehood Putin says doesn't exist. This is your Eurasian Union: an afterthought in the face of such forces as economics, nationalism, and fabricated anniversaries. Its unveiling earlier this month merited little coverage and less consequence. Perhaps realizing the letdown of his own doing, Putin devoted a grand total of five sentences toward the union in his much-vaunted three-hour press conference in December. This was Putin’s greatest geopolitical project, and two weeks in, it has all the makings of his greatest geopolitical disappointment.