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Kazakhstan, Uzbekistan and Eurasian Union 11 февраля 2015, 19:27

Two biggest Central Asian economies may become competitors if both are in the Eurasian Economic Union. For now, as Uzbek President expresses disinterest in joining the union, the bilateral cooperation and ties are strengthening.
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Islam Karimov and Nursultan Nazarbayev. Photo courtesy of the press service of the Presidental Palace Islam Karimov and Nursultan Nazarbayev. Photo courtesy of the press service of the Presidental Palace

The downslide of the oil prices and the Russian ruble trouble make people in Kazakhstan ponder about the prospects of the Eurasian Economic Union economies. And though there were media reports about the desire of some countries to join the Union, Uzbekistan does not appear to be one of them.

The Eurasian Economic Union is an economic integration of Kazakhstan, Russia, Belarus and Armenia that will soon be joined by Kyrgyzstan. It has a single market of 176 million people and a gross domestic product of over 4 trillion U.S. dollars. The union operates through supranational and intergovernmental institutions and provides free movement of goods, capital, services and people.

Many have been wondering whether another "stan" country - Uzbekistan, a southern neighbour of Kazakhstan and one of the leading economies of Central Asia - would also join the Union any time soon.

One of the reasons why Uzbekistan does not wish to join the integration at this point is that it will not be able to compete with Kazakhstan economically if they share an open border, Tengrinews reports citing political scientist Rustam Burnashev.

The expert said there were too many myths floating around Uzbekistan. In particular, he insisted that the situation in the country was more stable than it was portrayed in the media, that the country's political system was moving away from the principles of tribalism and succession of power and becoming more institutionalized and legal framework-oriented, as opposite to the situation in some of its neighbouring countries.

Burnashev voiced an opinion that  there were few to no benefits for Uzbekistan in joining the Eurasian Economic Union. In the single economic space Uzbek businessmen will not be able to compete with Kazakh oligarchs, who will gradually buy into all the significant production facilities of Uzbekistan.

He referred to the country's president Islam Karimov as saying several years ago that it would be unwise to combine two very different types of economies. Burnashev explained that Kazakhstan was relying on its strong banking sector whereas Uzbekistan's economy was based on industrial production.

Moreover, keeping its economy closed shielded Uzbekistan from the fallout of the global economic crises and has made the past seven years less painful for Uzbekistan than for other, more open, Central Asian countries. The dynamics of economic and social growth in Uzbekistan was not as pronounced as in Kazakhstan, but they were stable.

President of Uzbekistan Islam Karimov made it clear that he had no intention in joining the Eurasian Economic Union. On January 13, 2015, he declared that Uzbekistan was not interested in either the Eurasian Union or the Customs Union, adding that his country would never become member of an alliance resembling the former USSR.

Moscow Carnegie Center expert Alexei Malashenko told the Voice of America that Uzbekistan was at times “hostile” to the idea of the Eurasian Economic Union, but Russia was intending to soften its stance. He also noted that “not long ago there was a meeting between Nursultan Nazarbayev and Islam Karimov, where they discussed Russia's role in the Ukrainian crisis and, I think, the positions of Nazarbayev and Karimov, in general, coincide - none of them was particularly happy about it, I mean about the Russian actions towards the Crimea and Donbas.”

The Uzbek leader visited his Kazakhstani counterpart in late November and they both stressed their commitment to strengthening the bilateral cooperation. Nazarbaev said "stability and development of the entire region depends on the stance and the cooperation of Kazakhstan and Uzbekistan."

As for security in the region, Uzbekistan suspended its membership in the Collective Security Treaty Organization on Jun 28, 2012. Some interpreted this as a sign that Uzbekistan would agree to host a US military base on its territory. But Uzbekistan openly denounced this option in August, 2014.  

However, it became known that the country had been receiving large batches of military equipment from the United States. On January 22, 2015, in an interview with the Voice of America, Deputy Assistant Secretary of State for Central Asia Daniel Rosenblum said that the U.S. was giving 308 Mine-Resistant Ambush Protected Vehicles (MRAPs) and 20 Armored Recovery Vehicles to Uzbekistan. However it doesn't necessarily mean that Uzbekistan is tilting towards the United States, since it also appeared that Kazakhstan had expressed interest to getting a similar offer.

By Dinara Urazova, editing by Tatyana Kuzmina (Dmitry Khegai contributed to the story)

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