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Russia: Analysis From Washington -- The End Of The Former Soviet Union

  • Paul Goble

Washington, 21 September 1998 (RFE/RL) -- The continuing economic and political crisis in the Russian Federation has claimed yet another victim: the widespread belief that Moscow will somehow be able to restore a common economic space on the territory of the Former Soviet Union.

Instead, it has demonstrated just how different the economies and political systems of the 11 other former Soviet republics and the three Baltic states now are and why they are likely to become less integrated, rather than more, in the future.

Over the last month, many observers have focused on the immediate impact of the Russian crisis on exchange rates and stock market averages in these countries, a pattern they argue reflects just how integrated these countries are and how dependent the non-Russian countries remain on what happens in Moscow.

But these same observers have devoted significantly less attention to three other developments that point in the opposite direction: the anger the leaders of those countries most closely tied to Russia now feel toward Moscow, the success those least tied to Russia have had, and the obvious calculation that suggests to others thinking about the course they should adopt in the future.

Last Friday, Belarusian President Aleksandr Lukashenka reflected the anger that many in the non-Russian republics feel toward Moscow. He lashed out at the Moscow leadership for failing to warn its partners in the Commonwealth of Independent States about just how serious the Russian economic crisis in fact was.

Moscow's failure to do so in a timely fashion, Lukashenka continued, has meant that "we have suffered substantial damage from the collapse" in the Russian Federation. And he called on the new Russian leadership to follow an economic policy in line with "the principles according to which Belarus has been working for a long time already."

But Russian leaders are unlikely to see Lukashenka's words as encouraging. Only two days earlier, the Belarusian president imposed new and sharper restrictions on the export of food from Belarus, where prices are controlled, to Russia, where they are not.

Thus, those associated with the idea that the CIS should be strengthened, have been forced by the Russian collapse to say and do things that will make any move toward tighter integration that much less likely.

At the other end of the spectrum in this region are countries like Estonia that have almost totally severed their economic links with the Russian Federation and are thus the least exposed to the consequences of developments in the Russian marketplace.

While the Russian crisis has hurt them -- Estonia's stock market averages have fallen significantly in recent weeks -- it has also made them more, not less, independent of the Russian market. That repeats a pattern of six years ago.

At the beginning of 1992, Moscow insisted that Estonia pay world prices for its energy purchases from the Russian Federation, a policy that forced Estonia to turn to Western sources. At that time, the Scandinavian countries came to Tallinn's aid.

Now, many Russian firms cannot pay their debts, something that has hit Estonian fish and dairy exports to the Russian Federation. And once again, the West is helping out: The European Union last week cut restrictions on Estonian fish and dairy products to help that Baltic country avoid the most serious consequences of the Russian crisis.

The Belarusian and Estonian experiences are having an impact elsewhere in the region, suggesting to ever more governments that they must seek to limit their exposure to the vagaries of the Russian marketplace and find ways to integrate with the broader world economy.

Ukraine may be a bellwether in this respect. The Russian crisis has hit the Ukrainian economy hard: Ukraine's currency has dropped some 30 percent since the Russian ruble was devaluated. And Ukraine's leaders see no immediate way out of the situation, a conclusion reflected in Kyiv's decision on Friday to announce plans for some economic coordination with Moscow.

But over the longer term, Ukraine too is looking away from Russia. On Wednesday, visiting Polish Foreign Minister Bronislaw Geremek told Ukrainian leaders that Russia's crisis serves as a reminder of the need for speeding up economic reforms in Ukraine and speeding Kyiv's integration into Western institutions.

Promising that Warsaw would do everything "to support Ukraine in this difficult moment," Geremek called on Kyiv to impose full control over its eastern borders in order to permit the preservation of visa-free travel to Poland and integration into Western institutions.

If the Ukrainian leaders follow his advice -- and the Russian crisis makes that more rather than less likely given that Polish firms pay and Russian ones don't -- Kyiv too will be moving away from Moscow as well.

And whether because of anger, opportunity or concern, ever more of Russia's neighbors are likely to make a similar calculation, one that help put an end to discussions about the FSU as any kind of common economic space.