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India’s World – Significance of Eurasian Economic Union

Summary:

A new economic block, the Eurasian economic union, formally came into being on January 1. The new block includes Russia, Belarus, Armenia and Kazakhstan.

The Eurasian economic union is the final outcome of a process which began as a customs union in 2010 between Russia, Belarus and Kazakhstan. It transformed itself into a single economic space in 2012 to integrate trade, energy, industry and transport in the region.

The EEU will have free movement of goods, services and labour. It will also have its own bureaucratic structure.

The creation of EEU is being seen as the counter measure against Americans and Europeans attempt to isolate Russia.

Russia had also wanted to integrate the former states of the Soviet Union into one economic and political block. It was also a legitimate aspiration of Russia.

The west is seeing this move as a product to consolidate Russia’s hegemony over the erstwhile soviet space and have opposed it right from the beginning.

It will also help in overall economic development of the region.

Some look at it as a major political partnership.

Some experts say that given the condition of the Russian economy, it is felt that this was not the right time to launch. The stability of the Rouble is necessary for EEU to succeed.

Oil and Gas form the major part of Russia’s exports.

Absence of Ukraine in the EEU has diminished the value of this product.

Sino Russian ties have been growing progressively.

Russia’s and China central banks have agreed to bypass the dollar in bilateral debts and settlement payments.

With the establishment of EEU, Rouble will become the important currency in the region. With New Silk Road initiative Yuan will also become the important currency in the silk road region.

A currency’s dominance is not determined by the governments.

Russia and China coming together is not in India’s interest.