They are members of the Eastern Partnership with the European Union, a close cooperation program with the EU, and are planning to sign an Association Agreement and a deep and comprehensive free trade agreement with the EU at a summit in Vilnius, Lithuania, next month.
In response, Russia stamped on Moldova hard, writes David Herszenhorn in Wednesday’s New York Times. Deputy Prime Minister Dmitry Rogozin hinted that Moldovans would freeze this coming winter—Moldova is dependent on Russian gas for heat—while the Kremlin barred Moldova’s main exports (wine, fruits, and vegetables) from the Russian market.
As recent Heritage Foundation research clearly demonstrates, Russia is trying to force Ukraine to reject signing an association agreement and a free trade agreement with the EU—and compel it to opt for the Russia-led Customs Union and Eurasian Union.
Moscow told Kiev explicitly: If you are with the EU, you are against us. You will pay the price—in higher export tariffs, higher energy prices, and possibly limitations on visas and work for your citizens.
But is it really in the Russian interest to keep the countries of the former Soviet Union tied to itself at all costs?
The second half of the 20th century has shown that underdeveloped countries with good institutions that open up and integrate can not only catch up quickly with the developed economies but even surpass them.
The Asian tigers, such as Singapore and South Korea, made a giant leap from being agriculture-based societies to being drivers of innovations, exporting cutting-edge goods and technology and attracting investment at home.
Newsflash to the Kremlin: The Eastern Partnership is not a Western conspiracy. The West is not trying to suffocate Russia by dragging its closest neighbors away from it. What Russia should really fear is the lawlessness of the government and the poor domestic investment climate, which hinder innovations, encourage young people to emigrate, and make the government rhetoric of modernization nothing more than a sweet fairy tale.
Building a barbed wire around its neighbors is a wrong strategy for Russia. President Vladimir Putin proposed a common free trade area from Lisbon on the Atlantic to Vladivostok on the Pacific as a long-term goal for Russia and Europe. The problem is Russian imperialist phantom pains.
Thus, if Russia tried just as hard to become attractive for foreign investors and neighbors as it is now to prevent Ukraine and Moldova from integrating with the EU, it would do well by doing good.
International trade is not a zero-sum game. If backed by predictable rules of the game, in the long run trade benefits all its participants. It is time for the Russian government to put its efforts where its mouth is rather than forcing its neighbors into the new Russian camp.
Ivan Benovic is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.
Source material can be found at this site.