Russia expands Eurasian Union in competition with European bloc

Armenia, Kyrgyzstan to join Russia-led Eurasian Union, seen as Moscow's attempt to compete with the EU

Russian President Vladimir Putin expanded his emerging Eurasian Economic Union with the announcement Tuesday that tiny and impoverished Kyrgyzstan will join the bloc four months after it comes into force on New Year's Day.

The alliance of former Soviet republics was designed by the Kremlin leader to counter the Brussels-based European Union, which has spread its trade and political assimilation up to Russia's borders, including the Eastern European states that were members of Moscow-led Comecon during the Cold War era and the three ex-Soviet Baltic republics.

Russia's conflict with Ukraine, which erupted in violence in April and continues to roil Moscow's relations with much of Europe, was ignited by the Feb. 21 overthrow of Kremlin-allied Ukrainian President Viktor Yanukovich and the new Kiev leadership's decision to seek EU membership instead of joining Putin's rival alliance.

But the European Union sanctions imposed on Russia after its seizure of Ukraine's Crimea territory have created friction within the Eurasian bloc too. Russia's cutoff of EU food imports in retaliation for the sanctions allowed Belarus, strategically situated between Russia and the EU states of Eastern Europe, to profit as middle man in importing European products and reselling them to Russian importers. That has angered Moscow and driven a wedge between Putin and Belarus President Alexander Lukashenko, a longtime ally.

After Tuesday's ceremony in Moscow to sign documents among the five Eurasian Economic Union states, Lukashenko criticized Russian efforts to punish Belarus for its end run around sanctions. Russia has stopped importing meat and dairy products from Belarus, purportedly over concern about food purity, and put barriers in the way of Belarus exports through Russia to Kazakhstan.

"In violation of all international norms, we are faced with a transshipment ban," Lukashenko said at a news conference, exposing a rift in the nascent alliance.

The decision Tuesday to admit Kyrgyzstan, the poorest of the former Soviet bloc countries, also appeared unlikely to advance the Eurasian Economic Union's collective prosperity. With a per capita gross domestic product of $2,500, the tiny, landlocked Central Asian country of 5.6 million people ranks 185th among the 193 United Nations member states.

Russia has extended Kyrgyzstan a $200-million grant to help align its economic institutions with those of the other Eurasian bloc members -- Russia, Belarus, Kazakhstan and Armenia  -- the Sputnik news agency reported Tuesday.

Armenia also brings more economic woe than prospects, with its $6,300 per capita GDP and long-running dispute with neighboring Azerbaijan over its Armenian-populated Nagorno-Karabakh region.

Oil-rich Azerbaijan has yet to respond to Kremlin overtures to join the Eurasian trade group, and Tajikistan has also given no indication of whether it plans to join.

Kazakhstan President Nursultan Nazarbayev first proposed in 1994 a union of former Soviet states to facilitate the free movement of goods, services, labor and capital.

The five states so far committed to joining the Moscow-led bloc comprise a market of nearly 180 million people.

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