Last week, Russia's Kremlin Palace issued a statement that was very interesting in terms of its timing. It said Russia has been working on a draft bill that would eliminate the dollar and euro from the country's trade with Commonwealth of Independent States (CIS) countries and would help expand the use of national currencies in foreign trade payments and financial services. This means the creation of a single financial market between Russia, Armenia, Belarus, Kazakhstan and other countries of the former Soviet Union. Already, there is an agreement between Russia, Belarus, Armenia and Kazakhstan that obliges countries to complete their transition to the use of national currencies in trade within the framework of the Eurasian Economic Union (EEU) by 2025 and 2030. Moreover, Russia also signed an agreement with China for a transition to national currencies in trade.
Meanwhile, President Recep Tayyip Erdoğan paid a one-day but significant visit to Russia. All along the line, Erdoğan has been putting emphasis on trade without the dollar and stressing that Russia, Turkey, Iran and China should create a new economy and trade cycle that highlights the use of local currencies in trade, as he officially voiced the matter during his recent talks with Iranian and Chinese counterparts. Russia's emphasis on the use of local currencies in trade is one of the basic points of a new union. Even though this remains limited to CIS countries for the moment, it is very meaningful that this statement was made just before Erdoğan's visit.
A customs union agreement between Russia, Belarus and Kazakhstan came into force in 2010. This trilateral agreement is quite important for Russia, as it is one of the most concrete economic steps toward the achievement of its dream of a new post-Soviet empire. Let us go back in time. With the dissolution of the Soviet Union, the Russian administration created CIS countries through the triangle of the Russian Federation, Ukraine and Belarus. Here, the word commonwealth goes beyond its literal meaning and signifies a common and institutionalized form of wealth and welfare on a state level. In other words, it is a concept of an empire paradigm in the strictest sense. As such, the CIS is an implicit move toward a customs union that will grow into a fiscal and political union like the EU. This customs union will make Kazakhstan predominantly dependent on Russia and follow Russia's standards. If Russia wants this customs union to flourish into a monetary and political one, it should take Turkey into consideration and should not establish it as a new version of the Soviet Union or as a 19th century empire that is reminiscent of the Tsardom of Russia.
Customs union agreements to be reached in CIS countries alone will not benefit Russia in the long run. As seen in the Kazakhstan example, customs union agreements of this kind will lead to a decline in investments and sales of settled businesses that sell Turkish goods in the country. It will also cause foreign investments in Kazakhstan to move to Russia. This is a shortsighted strategy of Russia that does not aim to include Kazakhstan alone. If Russia intends to establish a post-Soviet empire by making dangerous alliances with dictatorships such as Iran and Syria, this bad strategy does not fit Russia's interests in the long term.
The customs union has increased the trade volume between Russia and Kazakhstan to $25 billion. Russian Prime Minister Dmitry Medvedev has often voiced Russia's satisfaction over the Russian-Kazakh customs union and said this is not only a customs union, but also a strategic beginning for the Eurasian union. This is a temporary success as it is impossible to establish a new tsardom or post-Soviet empire in the current phase of globalization. Transnational unions are possible in terms of a political and constitutional framework; however, these unions should be based on an open and liberal economy where market entries are completely free and currencies are convertible. In this respect, Turkey is a very important model for Russia, and the model that Erdoğan has developed over the past 13 years should not be ignored. Russia cannot achieve its objective of a union through cooperation with closed and autarchic economies such as Syria and Iran. In this regard, Turkey criticizes Russia's policy on Syria and support for Bashar Assad.
Russia should not create a continuous state of war by adhering to its strategy of Eurasian union (post-Soviet empire) and by captivating former Soviet countries on the one hand, and by supporting dictatorships such as Iran and Syria in the Middle East on the other. We have witnessed that this state of war can no longer keep oil prices high as Russia thinks. Considering that Russia can carry its energy through the Mediterranean and Thrace, it needs Turkey for energy transits as well. Furthermore, the energy stock exchange and the energy market to be established in Turkey soon will benefit Russia most and frustrate the EU's claims that Russia has created an energy monopoly.
In short, Kremlin's proposal of a new union, a new economy and trade cycle and a concomitant monetary system is applicable, but it will remain the dream of a 19th century empire without Turkey.
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