By 2015, Russia Wants To Establish A Eurasian Union To Rival The EU

Is Moscow’s proposed Eurasian Union an initiative to revitalize stagnant economies, or an attempt to re-establish a Soviet Union “lite?”  After the fall of the Soviet Union in 1991, the world suddenly had 15 more nation states, some of whom had not been sovereign territories since the 19th century.  Nevertheless, calls for a re-integration of the Eurasian region were soon heard, often led by Russia, according to (pdf) a Chatham House paper.  In 2005, Russian President Vladimir Putin called the fall of the USSR “a major geopolitical disaster of the century.”  There’s been a smattering of different attempts at unification, including the Commonwealth of Independent States security union, but a lack of commitment to creating the institutions have stalled efforts, Chatham House writes.

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Afghanistan finds reason to back Russia on Crimea referendum

KABUL, Afghanistan — Afghanistan this weekend joined Syria and Venezuela and became the newest member of a select club of nations: those that have publicly backed the Russian annexation of Crimea.

Citing “the free will of the Crimean people,” the office of President Hamid Karzai said, “we respect the decision the people of Crimea took through a recent referendum that considers Crimea as part of the Russian Federation.”

To the casual observer, becoming the first Western-backed democracy to express support for the widely denounced referendum in Crimea might seem an odd tack for Afghanistan, which depends heavily on assistance from the United States and European countries. Those nations wholeheartedly condemned the Russian takeover of Crimea and were unlikely to be supportive of Karzai’s decision.

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China buys up Russia’s backyard

Russia spent the end of last year battling the EU for control over Ukraine. But should the Kremlin have been paying more attention to what was going on its southern border instead? In the last three months, the Chinese have swept through Central and Eastern Europe (CEE) and Central Asia, buying up Russia’s backyard in a string of billion-dollar deals.  Chinese President Xi Jinping was set for a summit in Moscow in September last year, where Russian President Vladimir Putin was hoping to conclude a crucial natural gas deal that would see a gas pipeline built to connect Russia’s Siberian fields with China’s underdeveloped northwest territories. The pipeline project was agreed on years ago, but the deal has been held up, as the two sides can’t agree on the price of the gas that will flow through it.  However, instead of flying directly to Russia’s northern capital, President Xi went on a whirlwind tour of Central Asia. It was like a visit from Santa Claus as Xi distributed billions of dollars of deals along the way.  In what must have come as a shock to the Kremlin, during his last stop in Turkmenistan Xi signed off on a $60bn energy investment deal that includes $10bn to develop the massive Galkynysh gasfield which has gas reserves of some 1.3 trillion cubic metres – enough to meet China’s needs for several years. The Turkmen deal makes Gazprom’s deal largely superfluous.

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The sultan’s dream

ABDUL MEJID I, the Ottoman’s 31st sultan, had a dream. Reigning between 1839 and 1861, the determinedly Western-leaning sultan envisaged the construction of a submerged tunnel under the Bosphorus Straits connecting Asia to Europe. A French architect duly came up with a blueprint. But a dearth of technology and cash stood in the way.  The sultan’s dream is now coming true, 150 years later. The world’s first sea tunnel linking two continents will be inaugurated on October 29th, marking the 90th anniversary of the founding of Ataturk’s Republic. Stretching over 76km (47 miles), and with 1.4km of it laid at the bottom of the sea, the $3 billion “Marmaray” rail system will “eventually link London to Beijing, creating unimagined global connections” boasts Mustafa Kara, mayor of Istanbul’s Uskudar district, where the tunnel comes out.

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The Kremlin’s Collapsing Eurasian Sandcastle

Vladimir Putin’s dream of creating a Eurasian Union is about to breathe its last breath.  Over the past several weeks, Russia has made headlines with its bullying of Ukraine for the latter’s intention to sign an association agreement with the European Union in November. Frantic to keep for themselves what would be the crown jewel of the potential Eurasian Union, Russia has in the past month ordered intense checks of all Ukrainian goods entering Russia, banned imports of Ukrainian chocolate and warned Ukraine that it would lose its status as a “strategic partner” and face “defensive measures” should it sign the Agreement.  Russia knows very well that should Ukraine sign the EU Association Agreement, it will no longer have the tools to incorporate Ukraine into the Customs Union, thus making further political integration into the Eurasian Union impossible.

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Resource-rich Mongolia an outpost of the wild, wild east

Mongolia’s fairytale economic boom is developing cracks. The failure of the country’s fifth-largest bank and delays to the development of its giant copper mine underscores fears that its growth potential is built on shaky foundations. Yet greater economic realism may ultimately be welcome.  The surprise insolvency of Savings Bank, which controlled about 8 per cent of Mongolia’s banking assets, has rattled the country’s economic cheerleaders. The central bank closed down the lender and transferred its deposits to a state-owned rival after it ran up bad loans worth $109-million (U.S.) – more than twice its capital, according to Fitch Ratings. Some of these loans appear to have been made to Just Group, controlling corporate shareholder in Savings Bank, despite regulations designed to limit such exposures.

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