Customs Union approves roadmaps for Kyrgyzstan, Armenia

Last month, Kyrgyzstan and Armenia were approved to propose the so-called “roadmap” for integration into the Customs Union of Russia, Belarus, and Kazakhstan by a summit meeting in Astana (which recently announced its change in title and function to the Eurasian Economic Union or EEU at the beginning of next year). The roadmap has now hit the floor in the chaotic Kyrgyz Parliament, where recently elected Joomart Otorbayev faces an uphill battle for approval, as mechanisms for the transformation of the current regulatory frameworks must be implemented quickly and efficiently, a difficulty for a country that has seen many different governments in the recent years. The goal of the roadmap is to allow for countries to be absorbed into a single customs territory within which no customs duties or economic restrictions will be levied, much like the several free trade agreements in the West. By joining the CU as well, Kyrgyzstan gains access to a special fund of up to $200 million dollars a year to equip its customs and border patrol forces with China, Uzbekistan, and Tajikistan. Protesters in Bishkek, however, contend that joining the CU will lead to significant price increases that would make life harder for the average citizen, not easier.

In addition to the expected $200 million, the Russian Economic Ministry has approved a long term loan of $1 billion to Bishkek to help ease its integration into the country. In contradistinction to Kyrgyzstan’s need for aid, Armenia has already approved its road map and has been approved to join the CU during the conference in Astana earlier in the week. The only sticking point remains that Russia has supplied tanks to its regional rival, Azerbaijan, very recently – an issue which has raised a point of tension at this critical time.

Russia, Kazakhstan, and Belarus are no doubt accelerating the integration of the region into the EEU in the wake of the annexation of Crimea and foreign sanctions, which have caused significant capital outflow and liquidity problems for the Russian economy. Long-term, this could insulate the Russian economy from exogenous shocks from the West and bring it closer to its regional allies.

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