Putin creates ex-Soviet trade bloc, denies new USSR

[dipsydoodle]

Source: Reuters

(Reuters) - Russian President Vladimir Putin signed a treaty with Kazakhstan and Belarus on Thursday creating a vast trading bloc which he hopes will challenge the economic might of the United States, the European Union and China.

Putin denies the forging of the Eurasian Economic Union with two other former Soviet republics, coupled with Russia's annexation of Crimea from Ukraine, means he wants to rebuild a post-communist Soviet Union or as much of it as he can.

He does, however, intend the alliance, with a market of 170 million people, a combined annual GDP of $2.7 trillion and vast energy riches, to demonstrate that Western sanctions imposed over the crisis in Ukraine will not isolate Russia.

Read more: http://uk.reuters.com/article/2014/05/29/uk-ukraine-crisis-eurasia-idUKKBN0E90OB20140529

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General knowledge for anyone not aware - Kazakhstan is the size of western Europe.

Armenia and Kyrgyzstan have said that they want to join the union later.

[riqster]

1. Looking for lebensraum, that's all.

In Ukraine and elsewhere.

[Fred Drum]

4. obviously, putin no need lebensraum

soviet russia very big

[riqster]

6. LOL, no more soviet there. Just an imperialist scumbucket.

[Fred Drum]

8. no doubt

you would agree, putin no need lebensraum

the russians aren't really constrained

[riqster]

10. Neither are they restrained.

[DeSwiss]

21. You were saying?

[Fred Drum]

13. as far as living space, you would agree

no shortage?

[riqster]

15. Yep. But then, territorial expansionists usually don't have an objective need for it.

Not that it stops them.

[DeSwiss]

2. Good 'ol competition, what would we do without it?

- No true-blue capitalist can complain about that, now can they?

K&R

[center][/center]

[Bosonic]

3. They should have started with a smaller table

[davidpdx]

7. The larger table was meant to accommodate Putin's ego

[davidpdx]

5. Some of the most corrupt nations in the world....

Russia 127th (tied)
Kazakhstan 140th (tied)
Belarus 123rd (tied)

Armenia 94th (tied)
Kyrgyzstan 150th (tied)


Why not add:

Uzbekistan 168th (tied)
Tajikistan 154th
Turkmenistan 168th (tied)

Source

The apple doesn't fall far from the tree does it?

[pampango]

9. Sounds like the EU: "free transit of goods, services, capital and workforce"

It will be interesting to see if the free movement of people and goods works as well in the Eurasian Union as it does in the European Union. Hope it increases the quality of life as much for these folks.

The treaty deepens ties forged when the three countries took the initial step of creating a customs union in 2010 and guarantees the free transit of goods, services, capital and workforce and coordinates policy for major economic sectors.

Armenia and Kyrgyzstan, hardly economic powerhouses, are considering joining but other ex-Soviet republics, including oil and gas producer Azerbaijan, gas-rich Turkmenistan and Uzbekistan with its market of 30 million people, have steered clear of the union.

The creation of the new alliance also involves costs for Russia, posing an extra burden on an economy already on the brink of recession.

Russian Deputy Finance Minister Sergei Shatalov told Reuters in March that Belarus and Kazakhstan received about $6 billion annually from Russia in direct and indirect support, and said that could increase by $30 billion if all trade restrictions were lifted in 2015 after the union is created.

[davidpdx]

11. Size does not equal GDP or population

General knowledge for anyone not aware - Kazakhstan is the size of western Europe.

Western Europe not only has a larger population in terms of an economy that companies would want to invest and sell in, it also has quite a bit more GDP (just a little) than Kazakhstan.

Kazakhstan:

Population: 18 million (slightly less than Florida in the 2010 census)
GDP: $220 billion (slightly less than Connecticut)
Size: 1,052,000 sq miles (about the size of Alaska, Texas, and New Mexico)

[muriel_volestrangler]

12. It won't get into the league of the US, EU or China for a long time

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

Taking the IMF 2013 figures, in millions:
EU: 17,371,618 (largest: Germany: 3,635,959)
USA: 16,799,700
China: 9,181,377
Russia: 2,118,006 (plus a bit for Crimea, arguably)
Kazakhstan: 220,347
Belarus: 71,710
Armenia: 10,547
Kyrgyzstan: 7,225
other ex-USSR countries that might conceivably join:
Azerbaijan: 73,537
Uzbekistan: 56,476
Turkmenistan: 40,569
Tajikistan: 8,497

If they could get it all to join: Ukraine: 176,235

They could collectively overtake Germany within a few years, given developing country growth, but they need to quintuple the size of their economies to be as large as the USA or EU.

[Livluvgrow]

14. Let me get this straight

This trade bloc that is going to rival the largest economic powers on the globe has a combined actual GDP about as large as California and Oregon. Oh ok I will be sure to worry. Well, maybe they will strengthen their economies and become consumers of some fine quality crafted american goods. If you dig through the crap in our country and look in the right places we have some real fine quality. Heck just look at some of our instrument craftsmen. They are some of the finest in the world. I am sure they would love the extra work.

[DeSwiss]

20. Has to do with nature and math.....

- And the fact that even if what the Federal Reserve pulls from its bum is invisible, you can only pull it out so many times......

[happyslug]

22. At the Start of WWII, Japan GDP was less then Pennsylvania's GDP.

By the 1990s it was 1/2 of the US and were expected to pass the US by 2000 (Japan's economy then went into a deep slump that it has NOT recovered from, thus all talk of passing the US by 2000 was dead by the mid 1990s).

Just pointing out, that this is a start of something. It may be nothing, or it may be the start of something big, only time will tell.

Another way to look at this is in 1945 1/2 of the world's GDP was the USA's GDP. By the 1960s Western Europe as a whole has surpassed the US, and Russia claimed to be equal to the US (Russia economy started to decline in the 1960s, but it took the drop in oil prices of the 1980s to kill off the Soviet Union and the US estimated the Soviet Economy was only 1/2 the US economy in the 1970s).

Now, Russia's GDP declined in the 1990s under Yeltsin but has bounced back since 2000 and Putin becoming President of Russia. Russia is no where near what Russia was under the Soviet Union, but it is a lot better off then in the 1990s (Through the Russia economy of today is considered a lot healthier then it was under the Soviet Union, Russian Military spending is in the single digits, unlike the almost 40% of the economy Military spending was under the Soviet Union, anything more then 10% is considered unhealthy for the Economy).

Side note: The only country spending 40% of their GDP on defense today is Israel. This has lead to some economic problems in Israel, that is while reported in Israel, but goes unreported in the States. You can NOT spend 40% of your GDP on Defense and not wreck your economy, that was the mistake of the post Stalin Soviet Union. Yes, under Stalin Military Spending, except for WWII, appears to have been under 10% of the Economy, it started to raise under Khrushchev, and then accelerated under Brezhnev. Thus by the time of Gorbachev the Soviet Economy was in dire need of reform, and reform in the sense of a massive cut back in Defense Spending. This lead to the Soviet Withdraw from Eastern Europe and the Coup to reverse that cut back in spending, the failure of that coup and the massive cut back in defense spending in the 1990s.

Under Putin Defense spending has gone up, but no where near Soviet Era Spending. Putin's big improvement was in paying pensions and other Social programs. This increase in spending ended all the old people selling things on the streets in an effort to buy food and pay rent. That was one of the first thing Putin did, increase spending on Social Programs and with that spending won those voters to his cause (the Communists had been the one advocating such a program in the 1990s, but they were out of power, it must be frustrating for the Communists to know what they advocated for the Former Soviet Union AFTER the collapse of the Soviet Union was adopted by Putin and his clique who gets full credit for those programs).

Side note: Gorbachev started the policy of cutting back Defense Spending in the Soviet Union, this lead to the coup. The Communist Party then split up. Many of the old leadership became the oligarchs under Yeltsin. They wanted power and in the post Communist Russia that meant control of the wealth of the nation. The rank and file wanted increase social spending and reinstatement of the various pensions people earned when working for the Soviet Union and this became they main call after their failed attempt to overthrow Yeltsin in 1995. The Russian Communist Party declined in the 1990s, but has increased in numbers since 2000 on the platform of reining in the Oligarchs. The Communists are the main opposition to Putin and the one he keeps an eye on. The Communists acknowledge the mistakes the party did under Brezhnev and vow to avoid that road, but they want increase spending on social programs and increase taxes and restrictions on the oligarchs (Putin is tied in with the oligarchs through he does oppose certain ones, thus his policy of low taxes on the rich but increase spending on social programs to keep the masses from voting Communist). Putin's taking of Crimea looks more and more like a thrift of oil (and that may explain why Washington is so upset about it, they wanted the Crimea's oil wealth to be theirs not Russia's) and thus Putin's refusal to do anything in the Eastern Ukraine (The revolt in the Eastern Ukraine appears to be local in origin contrary to what is being reported in the Western Press).

I bring this up for this merger is to bring these three nations together. These nations are all part of that area where one flows into the other. There are NO clear dividing lines between these nations, the borders are all lines drawn in the sand. As such all three nations view themselves independent but also one with each other. This leads to a need to deal with each other as something more then independent nations, but less then a centralized nation-state. Thus this agreement to work together as one. This will help each of them expand their economies to a greater degree then if they stayed 100% independent of each other.

[geek tragedy]

16. Belarus AND Kazakhstan?

[enid602]

17. Putin

Putin's statesmanship in creating this economic bloc might be seen as an admission that he's lost in the Ukraine. To save face with his countrymen.

[dipsydoodle]

19. Although just signed this is hardly recent.

This is bi-product of the CIS http://www.cisstat.com/eng/cis.htm

The intent was always to set up an economic trade group. Of late Ukraine has more or less left the group.

[JVS]

29. This has been in the works since long before the Ukraine coup.

[happyslug]

18. What was the Soviet Union, and before that the Russian Empire, was Genghis Khan's Empire

Prior to Genghis Khan, what is now Mongolia to Russia was a collection of tribes with uncertain and over lapping borders. This lead to constant warfare between those tribes and the countries on their edges (including Greece, Turkey, Iran and China). The iron plow was introduced into Russia, the Ukraine and Poland around 600 AD, which permitted farming on areas that previously had been used for grazing, but this had only reached Russia by the time of Genghis Khan. Thus Russia, the Ukraine and even Poland had converted to agriculture but were still subject to raids from herders to their East (And this would continue to a degree till Catherine the Great took over the Crimea and moved Russian troops into what is now Kazakhstan).

Genghis Khan, from his base in Mongolia united what is now Russia, Kazakhstan (and the rest of the Former Central Asia Soviet Republics), with Iran and Northern China. Within 150 years his empire had broke up into smaller empires, China, Iran and the Former Soviet Central Asia Republics (including Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan and Kazakhstan), and the "Golden Horde" that controlled Russia and most of the Ukraine and overlapped Kazakhstan. The Ottoman Empire moved in and supported the Crimea moslems in this time period when they broke from the Golden Horde and Continued to do so till the time of Catherine the Great (who took over the Crimea).

Now,Genghis Khan's Empire did break up, but the knowledge of the benefits of being united did NOT die with that break up. Timerlane tried to recreate it (and extend it to India), but failed (His greatest Enemy, the Golden Horde could rely on assistance from the Ottomans, the remains of the Byzantine Empire, Poland, China, then ruled by the Ming Dynasty, Russia and the Ukraine in their fight with Timerlane). The fighting between the Golden Horde and Timerlane weakened both, so after the death of Timerlane, his empire collapsed (and his family moved to India to find the Mungol Empire of India).

At that point of time the Russia made their bid for freedom from the Golden Horde and achieved it. Within 100 years, the Golden Horde had ceased to exist and the Russia Czar added the title of Khan of the Golden Horde to his own titles AND then claimed the color of White as his Color. White was the Chinese and Mongolian color for the West.

From that point forward, Russia moved East, providing the locals what they had had under Genghis Khan, a united country where trade could prosper. Russia did have some problems dealing with the remains of Timerlane's empire, but ended the raids into Russia from those lands in the 1700s and took them over officially in the late 1800s.

The problem is Russia is the only country between Moscow and the Pacific with the population to dominate this region. Thus it is the successor to the Empire of Genghis Khan. In many ways the other nations of what was the Russia Empire (and later the Soviet Union) want to be part of that greater empire. They also want to be independent. Stalin's solution to this problem was the concept of a Russian Federation of States (much like the US and its Federal and State Governments) but with even more self ruled Autonomous Republic attached to and part of that Federation. On top of this double form of Federation, the Soviet Union itself was a federation of Soviet States. Thus you had three levels of federation within the Soviet Union. The First level was the Russia Federations and its states, the Second level was the Autonomous Republics attached to that Federation. The third level was the Soviet Union itself, for it was also a federation. Independence and unity at the same time.

This reflected the double nature of most of the non-Russian people of Russia, they want to be part of Russia, yet independent of it. This reflect that fact they are landlocked and as such has to deal with Russia if they really want to trade with the rest of the world. The easiest trade routes to the ocean is via Russia from most of the Former Soviet Union. Thus Russia provides the easiest trade routes for such countries, and trade tend to unite people not divide them. These people remember the Empire of Genghis Khan, the successor States of that Empire that tried to keep the unity up while seeking independence and the slow raise of Russia and its take over of the role done by the Mongols under Genghis Khan.

Thus, that the Countries of the Former Soviet Union (outside of Europe) would want to form some sort of united government with Russia reflects over 800 years of traditions and history. Such Countries also want to be independent but not at the cost of living in poverty. Thus some sort of union will happen, people have talked about this happening since the break up of the Soviet Union (The greatest push to prevent the final break up of the Soviet Union came from the Former Soviet Central Asia States for example). The Former Soviet Central Asia States are also part of Greater Iran, Iran is the country with the second largest pull from those countries. This is also the homeland of the Turks (The Turks of modern Turkey first entered the Middle East and then Asia Minor by moving from Central Asia to the Middle East via Iran between 800 and 1200 AD), thus connections with Modern Turkey is strong.

The biggest problem is the best trade routes is via Russia. You have mountains in the way in all other directions and the easiest way to get to the sea is via the Volga and the Don Rivers of Russia. The Volga permits trade not only to the Black Sea (Via the Volga-Don Canal) but also the Baltic Sea and the Atlantic via Murmansk. Thus to have easy trade the countries of Central Asia has to deal with Russia, and both them and the Russians know that. They have other alternatives, but none are as nice as Russia. Thus union with Russia is something these countries want, at the same time they want their independence. This requires a careful balancing of both to make both workable and that is what Putin is doing with this deal.

Yes, it is a "recreation" of the Soviet Union, but then the Soviet Union was a recreation of the Russia Empire which was itself a recreation of the Empire of Genghis Khan.

[Arkana]

23. Putin fancies himself a latter-day Stalin.

[Adrahil]

25. He certainly has not discouraged the reassertion of Stalin as a great hero. NT

[Hekate]

24. I'm shocked, shocked! I tell you, to find that there is expansionism going on!

for the irony-impaired --->

[hrmjustin]

27. Sometimes I want to join Canada but I don't expect NY to join Canada.

[dipsydoodle]

28. That's largely those in the east who face unemployment.

.