The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
While the formation of the Eurasian Economic Union (EEU), effective from 1st January 2015, sounds like an epoch-making historic bloc, it is unlikely to stir much attention from the Western world with unclear economic advantages. The EEU, includes Russia, Belarus, Kazakhstan and Armenia (with Kyrgyzstan expected to join later this year), covers over 15.0% of the world’s land area and hopes to rival the European Union (EU). Yet its biggest weakness is the absence of Ukraine – the second largest post-Soviet state – making it rather difficult to compete with the EU.
Land Area in the EEU and the EU: 2013
Source: Euromonitor International from UN Food and Agriculture Organisation, FAOSTAT
World’s Top 15 Countries with Proven Oil Reserves: 2013
Source: Euromonitor International from BP Amoco, BP Statistical Review of World Energy
Russian President Vladimir Putin’s attempt of creating a post-Soviet bloc to rival the EU might be more of a political union behind the façade of an economic union that aims to pool its lucrative resources together and create a single market economy in post-Soviet states allowing free movement of trade, services, capital and labour by 2025:
The EEU is an attempt to redraw the global economic map. It has the potential to become a powerful economic centre for trade from Europe and Asia and will no doubt lower costs of doing business in member countries in the long run. There is, however, no clarity as to how this economic integration can culminate into something that member countries can benefit from. Sanctions from the Western world against Russia and the global decline in commodity prices are biting member countries. Welcoming new members, especially Asian countries, will be the key to the EEU’s success in the future particularly as any country that joins the EEU cannot join the EU. Tajikistan is evaluating its proposal of joining the bloc while Maldova is divided. Others in Asia are more likely to closely watch the EEU to see what type of trade body it forms and evaluate whether they want to join.