Economic cooperation “from Lisbon to Vladivostok”

Last year IIASA launched an international interdisciplinary project, “Challenges and Opportunities of Economic Integration within wider European and Eurasian Space.” This project focuses on trade, energy, infrastructure, institutions, and demographic aspects of economic integration in the EU and RBK-CU “from Lisbon to Vladivostok,” and may also explore a truly trans-continental dimension extending cooperation to key Asian players, such as China, South Korea, and Japan, usually referred to as “from Lisbon to Shanghai.”

Since the collapse of the USSR, the former Soviet republics have been integrating into the global economy, mostly as exporters of commodities and importers of machinery, equipment and consumer goods. Having left the initial transition shocks behind, based on a myriad of economic, infrastructural, social, and cultural ties, some of these countries have now been moving towards re-integration, notably on the basis of the Customs Union of Russia, Belarus, and Kazakhstan (RBK-CU) established in 2010 and the Single Economic Space (SES) deepening RBK-CU from 2012. The CU secured the free movement of goods and common import tariffs and the SES ensures free movement of services, labor, and capital, boosting trade between its members. The next step in integration is envisaged to be the establishment of a Eurasian Economic Union (EEU), likely including Armenia and Kyrgyzstan, which would ultimately conduct coordinated economic policy. 

The EU is by far the most important trading partner of Russia, Belarus, and Kazakhstan and of the RBK-CU/SES as a whole. Belarus trades about 40% of its exports with the EU, and Russia
and Kazakhstan more than 50%.

The current situation around the case of Ukraine has and will continue to have implications on both current economic relations and future cooperation. However, once the current crisis passes, it will be time to make longer term strategic decisions based on rational economic reasoning. The EU, Russia, and their common neighbors are bound to cooperate: they are tied together by territorial proximity, trade of strategically important goods such as energy, and many other factors. Countries in the common neighborhood, such as Ukraine, should be able to benefit from the deep and high-quality economic relations with both the EU and Russia.

Ultimate decisions will be made by authorities: the challenge to the science and expert community is to provide holistic and comprehensive analysis that explores country-and region-specific integration scenarios in economic and social dimensions. The next and key challenge is to make scientific information available for policymakers and the public through a fully participatory interactive approach. The project, in addition to its scientific methodological contributions and due to its international multidisciplinary and independent nature, is well positioned to provide scientific substantiation in support of possible solutions for the current crisis and across all major parties involved.

Previous research on economic integration on the region has already evaluated the impact of some integration scenarios for some countries and regions. These studies relied on qualitative and quantitative methods, such as computational general equilibrium modeling, statistical and econometric analysis, and surveys. But because these individual studies use different assumptions, different countries and regions, different data, and different approaches, they produced sometimes contradictory results. To date, there has been no single study that evaluated a sufficiently broad portfolio of integration scenarios.

Our new project will carry out a meta-analysis of the alternative results obtained by different studies. We aim to draw a road map for further, more comprehensive research on plausible futures of the economic relations between the EU, the RBK-CU/SES/EEU, and their neighbors.

Further Information

Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space

The international research project “Challenges and Opportunities of Economic Integration within a Wider European and Eurasian Space” focuses on plausible futures of economic cooperation in the Greater Eurasian space and interplay between different integration processes in the region. A particular specific aim of the project is to discuss, analyze, and critically evaluate diverse issues related to economic cooperation between countries and blocks within the Eurasian continent covering the European Union, the Eurasian Economic Union, Eastern Partnership, Central Asia, and their neighbors. More

Last edited: 29 July 2014