Publication: Monitor Volume: 6 Issue: 51

Meeting on March 10 in Moscow, the CIS Economic Council (EC) adopted a five-year development plan for the Commonwealth outwardly reminiscent of the former Soviet Union’s Gosplan, the breeding ground of some of the EC’s Russian staffers responsible for the latest scheme. Unlike the detailed five-year ones of old, however, the EC’s plan contains merely general desiderata for “integration” rather than quantitative guidelines. Its centerpiece is a concept to unify the member countries’ system of classifying mutually traded goods, with a view to instituting uniform taxation and transport tariffs CIS-wide at an unspecified future time. This is what remains of the ambitious, six-year-old goal to create a CIS Free Trade Zone (FTZ)–a casualty of Russian protectionism in the first place. The January 2000 CIS summit, chaired by Russia’s Acting President Vladimir Putin, deferred that goal indefinitely (see the Monitor, January 26-28 and the Fortnight in Review, February 4).

The EC is the successor to the Interstate Economic Committee (MEK), which had vegetated for five years as the executive organ of the stillborn CIS Economic Union. The twelve member countries of the CIS each delegate a deputy prime minister to EC meetings, which–as resolved in the March 10 session–will be held quarterly. During that session Belarusan Deputy Prime Minister Leanid Kozik was elected to serve as EC chairman for a one-year term in accordance with the rule of rotation in the Russian alphabetical order, after Azerbaijan and Armenia declined the chair. Kozik’s boss Alyaksandr Lukashenka is clamoring for unrestricted Belarusan access to the Russian market, a goal which he has not achieved in the framework of the Russia-Belarus Union. Not surprisingly, Kozik urged all CIS countries to “exert every effort and insistently promote the FTZ,” even if success “won’t come soon.”

Part of the EC’s meeting was held at the headquarters of Gazprom’s affiliate Itera company. That part of the meeting discussed long-term Russian gas deliveries to member countries and payment through property transfers by indebted countries. Moscow seeks to link those issues, whereas independent-minded governments seek to decouple them. Itera is currently handling a rapidly growing share of Gazprom’s deliveries within the CIS and is engaged in asset-grabbing in several countries. For example, it bids to take over Armenia’s electrical power system, a move opposed on economic grounds by the World Bank (IWPR Caucasus Reporting Service, March 3). At the Moscow meeting, Itera president Igor Makarov cited Itera’s success in acquiring control of Moldova’s modern steel plant at Rybnitsa in Transdniester, with an annual export of 1 million tons of steel products, mostly outside the CIS.

The Ukrainian delegation, headed by Deputy Prime Minister Serhy Tyhypko, rejected the Russian government’s list of goods to be excluded from the bilateral free trade agreements which are supposed to make up the FTZ. The Russian side wants exclusions for no fewer than 320 types of goods, including some major exports of Ukraine’s steel, machine-building and food-processing industries. A decision on the matter was deferred to the next CIS summit, which–if experience is any guide–will probably defer it to the summit after that (Itar-Tass, March 10; UNIAN, March 9; Eastern Economist Daily (Kyiv), March 10).