Post-Communist Economic Integration : Belarus, Kazakhstan, and Russia

Abstract

The focus of this paper is the political economy of integration in the framework of the Customs Union and Single Economic Space. Clearly, Russia is a dominant power in this project, and her political interests may outweigh economic ones. However, neither Belarus nor Kazakhstan is forcefully pushed into the Customs Union and Single Economic Space. From the economic viewpoint, they join because Russia is the biggest and most accessible market for their exports, and is also rich in natural resources, which is particularly important for Belarus. There is likely to be both trade creation and trade diversion within the Customs Union and Single Economic Space, and it will concern mainly manufactures, which are now predominantly imported from the outside world. Increased demand for local manufactured goods, in turn, should lead to more employment opportunities in manufacture and agriculture sectors, and better social security for the workers of Belarus, Kazakhstan, and Russia. On the political side, though, this will inevitably play in the hands of the increasingly undemocratic political regimes.