Eurasian Union - politically scary, economically attractive
10 October, 2013
Eurasian Union - politically scary, economically attractive
Eurasian Union, a scare-structure endangering the Georgian west-oriented political vector, may be fairly beneficial from economic points of view if used properly. “I am observing and scrutinizing the Eurasian Union. We have no definite position at the moment but if we find it interesting for the strategy of our country, why not?” Bidzina Ivanishvili, Prime Minister of Georgia, stated during his meeting with media early last month and opened a Pandora’s box of rumors and speculations.
His political opponents accused
the administration of covert negotiations with the Kremlin on the topic of Russian-initiated common customs space, incorporating Russia, Belarus and Kazakhstan at the moment but looking forward to integrating all former Soviet satellites plus China and India on top of them. They predict a change of political course of Georgia as Eurasian Union integration excludes the EU-integration. After a month of finger-pointing and futile attempts on the part of the authorities to disperse the suspicions of alleged change of the political course, a special conference was held past week where the authorities confirmed once again that the EU is a national political choice and it doesn’t depend on the power shift. On the other hand, another video-conference with Moscow, held at the Russian new agency RIA Novosti, discussed the possible Eurasian Union prospects for Georgia. Notwithstanding political insinuations depicting Eurasian Union as a hazard, certain Georgian economic analysts believe this union can be economically very attractive to Georgia and economic prospects should not become victim of political games. Lia Eliava, a financial analyst, downplays the warnings that Eurasian Union may bar western partnership or free trade with EU.
According to her, the more commercial unions country joins, the bigger are the market opportunities as such unions remove not only customs barriers but imply lots of trade preferences. Eurasian Union already that incorporates huge markets where Georgian product is popular unlike the EU, is a brilliant opportunity for Georgian export. “EU market is far away even if we get it immediately. The conclusion of the agreements itself does not open the market. Enactment of regulations and quality demands required by the EU will take a decade, whereas markets of less regulated post-Soviet countries and Asia may be more lucrative with much better opportunities,” Eliava said. “The time of wars is gone. All former political rivals fighting each other for centuries including Russia, Germany and France, are now economic allies. We should do the same. EU and USA are nervous about Eurasian Union because they fear that the latter may become their powerful trade competitor; in particular, if China joins the union.”
Based on the trade statistics, Soso Archvadze, an economic analyst, points out that whatever the Georgian political vector is, the country is apparently tied economically to the CIS space more than any of the three South Caucasus republics. Wheat, raw materials and fuel resources all come from the CIS space, particularly from Azerbaijan, Russia and Kazakhstan, while ready-made products of China, India and Turkey flood the Georgian market.
As a matter of fact, statistics of the last decade show that the major market for Georgian export is Commonwealth of Independent States (CIS) which makes up to 50% of the export, whereas EU countries follow with less than 30%. Meantime, roughly 30% of the Georgian import falls on EU and less than 23% comes from the CIS space. “Today we are the sale market to EU while the CIS space is a sale market to us,” Eliava elaborates.
Besides, Georgia should not neglect the fact that the scale of “richness” is moving toward Asia. Archvadze sees no harm to join economically profitable projects in Asia if the country will adhere to its declared political and democratic values and never bargain on its independence or territorial integrity. “The UK slogan is that there are no constant partners and constant enemies but only constant needs. We should take this pragmatic attitude. Our economic unions must be multi-vectored,” he sums up.
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