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CIS Executive Secretary Boris Berezovskii recently unveiled his blueprint for reversing "seven years of disintegration" and breathing new life into the moribund Commonwealth of Independent States. The blueprint offers a framework for mutually beneficial economic cooperation among CIS members. Somewhat inauspiciously, perhaps, it was published in "Nezavisimaya gazeta" on Friday, 13 November.

Over the past 10 days, Berezovskii has been touring the CIS states in an attempt to persuade their presidents to endorse his plan. To date, the presidents of Kazakhstan, Kyrgyzstan, Ukraine, Moldova, Georgia, Armenia, and Tajikistan have expressed cautious support, while their Azerbaijani and Turkmen counterparts have proven more skeptical. A discussion of Berezovskii's proposals is on the agenda for the CIS summit scheduled for 11-12 December, Russian President Boris Yeltsin's health permitting.

Berezovskii was appointed executive secretary of the CIS in April 1998, when strains within the commonwealth had reached such magnitude that many observers were predicting its imminent demise. Those tensions derived partly from the CIS's failure to preserve a single, viable economic space composed of the former Soviet republics and partly from President Yeltsin's warning at the March 1997 CIS summit that Russia is prepared to resort to subversion and sabotage to weaken the Soviet successor states and keep them within its sphere of influence.

In the "Nezavisimaya gazeta" article, Berezovskii expresses concern that widespread disenchantment with the CIS could evolve into anti-Russian sentiment within the non-Russian successor states and give rise to centrifugal tendencies within Russia itself. Berezovskii emphasizes that resurrecting the USSR is impossible, given that the union was geared toward a planned, not a market economy. At the same time, he argues that voluntary economic integration is in the interest of all CIS states, since it would expedite their integration into the global economy. But given that the primary reason for the demise of the USSR was the failure of its Communist Party to address the grievances of the nonRussian republics, any attempt to rebuild the political foundations of the CIS should be undertaken with extreme caution so as not to impinge on the desire of newly independent states to protect their sovereignty and independence, Berezovskii comments.

As the first step toward reversing centrifugal economic trends, Berezovskii proposes creating one or several CIS free trade zones. (Among the hundreds of CIS agreements signed but not implemented over the past seven years is one, signed in April 1994, on setting up such a zone. That accord, however, fails to provide either clear guidelines or a timetable for doing so.) The Special CIS Inter-State Forum, created after the CIS Chisinau summit in October 1997, also considered the possibility of free trade zones. It used the April 1994 agreement as a springboard but failed to make recommendations on fundamental issues, including whether such zones should encompass only the movement of goods or also the service sector.

In this context, Berezovskii warns that "palliative measures" are dangerous. A flawed blueprint for economic integration might temporarily create the illusion that the CIS is functioning effectively as an economic organization, but the inevitable disillusionment when that proved not to be the case would be so profound as to pose a real threat to the Commonwealth's survival.

Berezovskii distinguishes two approaches to economic integration: the "soft" approach, as epitomized by the European Free Trade Association (created by countries that did not meet the criteria for entry into the EU), and the "hard" approach, as exemplified by the EU, in which economic integration paves the way for the creation of supranational structures, both economic and political. (One CIS proponent of the "hard" approach is the Kazakh economist Nigmatzhan Isingarin, who recently included in a list of "urgent priorities" for CIS integration the "gradual coordination [sblizhenie] of foreign policy positions.")

Berezovskii considers the "soft" approach more appropriate for the CIS and proposes a CIS free trade zone as a first step in that direction. But he also predicts that the "soft" approach may acquire a momentum of its own: reversing the decline in intra-CIS trade would serve as the incentive for a CIS Customs Union, which, in turn, would engender moves to coordinate monetary policy and create a single market. Thus the "soft" approach may eventually lead to its members' accepting the "hard" approach. In this context, Berezovskii cites the fusion of the European Free Trade Association into the European Community. The (possibly fatal) difference between the EU and Berezovskii's blueprint is, of course, that the EU was not built from the remnants of a former empire.

Moreover, Berezovskii's envisaged transition from a "soft" to a "hard" approach toward economic integration may cause an acute allergic reaction among those nonRussians who are inclined to see ulterior neoimperialist
motives behind any Russian advocacy of
supra-national structures, thus jeopardizing the free trade zone from the outset. Berezovskii himself concedes that "introducing supra-national elements into the CIS at the present stage would not correspond to the strategic interests of its members." But he adds that "without a certain degree of coordination, it will be impossible to proceed further than creating a free trade zone."

Berezovskii's success in selling his blueprint to the skeptics among the CIS presidents will depend on his ability to persuade them that the document is not intended ultimately to undermine their sovereignty and that the momentum can be halted before economic integration expands into the political sphere.

PUSTOVOYTENKO SEES KUCHMA AS ONLY CENTRIST PRESIDENTIAL HOPEFUL. Ukrainian Prime Minister Valeriy Pustovoytenko says that President Leonid Kuchma should run as "the only candidate of the centrist forces" in the 1999 presidential polls, Interfax reported on 23 November. Addressing a congress of the pro-presidential Popular Democratic Party the previous day, Pustovoytenko said Kuchma "is capable of uniting around him all moderate political forces and of continuing the course of socially oriented, consistent economic restructuring." The premier urged the party to support Kuchma as its presidential candidate and to initiate the signing of a memorandum on uniting parties "that pursue stability and socially oriented economic reforms." JM

UKRAINE, RUSSIA AGREE ON GAS SUPPLIES. Ukrainian First Deputy Premier Anatoliy Holubchenko said on 23 November that Ukraine and Russia have agreed on supplies of Russian gas to Ukraine in 1999, AP reported. According to Holubchenko, Russia will deliver 62 billion cubic meters in 1999, covering most of Ukraine's gas needs. Of that amount, 32 billion cubic meters will be supplied as payment for the transit of Russian gas through Ukrainian territory en route to Western Europe. Russian gas supplies to Ukraine will cost $50 per 1,000 cubic meters. JM

MOLDOVA SEEKS HELP TO FILL ENERGY VOID. Deputy Prime Minister Valentin Dolganiuc flew to Bucharest on 23 November in an effort to secure emergency electricity supplies for his country, Reuters reported. Dolganiuc is reported to be offering Romania shares in companies soon to be privatized in exchange for electricity. Moldova produces less than one-third of the electricity it needs and relies on Ukraine, Russia, and Romania for the rest. Rompres reported that Ukraine recently reduced its energy supplies to Moldova by some 50 percent. As a result, residents of Chisinau are experiencing brownouts for much of the day. PB

CIS Executive Secretary Boris Berezovskii recently unveiled his blueprint for reversing "seven years of disintegration" and breathing new life into the moribund Commonwealth of Independent States. The blueprint offers a framework for mutually beneficial economic cooperation among CIS members. Somewhat inauspiciously, perhaps, it was published in "Nezavisimaya gazeta" on Friday, 13 November.

Over the past 10 days, Berezovskii has been touring the CIS states in an attempt to persuade their presidents to endorse his plan. To date, the presidents of Kazakhstan, Kyrgyzstan, Ukraine, Moldova, Georgia, Armenia, and Tajikistan have expressed cautious support, while their Azerbaijani and Turkmen counterparts have proven more skeptical. A discussion of Berezovskii's proposals is on the agenda for the CIS summit scheduled for 11-12 December, Russian President Boris Yeltsin's health permitting.

Berezovskii was appointed executive secretary of the CIS in April 1998, when strains within the commonwealth had reached such magnitude that many observers were predicting its imminent demise. Those tensions derived partly from the CIS's failure to preserve a single, viable economic space composed of the former Soviet republics and partly from President Yeltsin's warning at the March 1997 CIS summit that Russia is prepared to resort to subversion and sabotage to weaken the Soviet successor states and keep them within its sphere of influence.

In the "Nezavisimaya gazeta" article, Berezovskii expresses concern that widespread disenchantment with the CIS could evolve into anti-Russian sentiment within the non-Russian successor states and give rise to centrifugal tendencies within Russia itself. Berezovskii emphasizes that resurrecting the USSR is impossible, given that the union was geared toward a planned, not a market economy. At the same time, he argues that voluntary economic integration is in the interest of all CIS states, since it would expedite their integration into the global economy. But given that the primary reason for the demise of the USSR was the failure of its Communist Party to address the grievances of the nonRussian republics, any attempt to rebuild the political foundations of the CIS should be undertaken with extreme caution so as not to impinge on the desire of newly independent states to protect their sovereignty and independence, Berezovskii comments.

As the first step toward reversing centrifugal economic trends, Berezovskii proposes creating one or several CIS free trade zones. (Among the hundreds of CIS agreements signed but not implemented over the past seven years is one, signed in April 1994, on setting up such a zone. That accord, however, fails to provide either clear guidelines or a timetable for doing so.) The Special CIS Inter-State Forum, created after the CIS Chisinau summit in October 1997, also considered the possibility of free trade zones. It used the April 1994 agreement as a springboard but failed to make recommendations on fundamental issues, including whether such zones should encompass only the movement of goods or also the service sector.

In this context, Berezovskii warns that "palliative measures" are dangerous. A flawed blueprint for economic integration might temporarily create the illusion that the CIS is functioning effectively as an economic organization, but the inevitable disillusionment when that proved not to be the case would be so profound as to pose a real threat to the Commonwealth's survival.

Berezovskii distinguishes two approaches to economic integration: the "soft" approach, as epitomized by the European Free Trade Association (created by countries that did not meet the criteria for entry into the EU), and the "hard" approach, as exemplified by the EU, in which economic integration paves the way for the creation of supranational structures, both economic and political. (One CIS proponent of the "hard" approach is the Kazakh economist Nigmatzhan Isingarin, who recently included in a list of "urgent priorities" for CIS integration the "gradual coordination [sblizhenie] of foreign policy positions.")

Berezovskii considers the "soft" approach more appropriate for the CIS and proposes a CIS free trade zone as a first step in that direction. But he also predicts that the "soft" approach may acquire a momentum of its own: reversing the decline in intra-CIS trade would serve as the incentive for a CIS Customs Union, which, in turn, would engender moves to coordinate monetary policy and create a single market. Thus the "soft" approach may eventually lead to its members' accepting the "hard" approach. In this context, Berezovskii cites the fusion of the European Free Trade Association into the European Community. The (possibly fatal) difference between the EU and Berezovskii's blueprint is, of course, that the EU was not built from the remnants of a former empire.

Moreover, Berezovskii's envisaged transition from a "soft" to a "hard" approach toward economic integration may cause an acute allergic reaction among those nonRussians who are inclined to see ulterior neoimperialist
motives behind any Russian advocacy of
supra-national structures, thus jeopardizing the free trade zone from the outset. Berezovskii himself concedes that "introducing supra-national elements into the CIS at the present stage would not correspond to the strategic interests of its members." But he adds that "without a certain degree of coordination, it will be impossible to proceed further than creating a free trade zone."

Berezovskii's success in selling his blueprint to the skeptics among the CIS presidents will depend on his ability to persuade them that the document is not intended ultimately to undermine their sovereignty and that the momentum can be halted before economic integration expands into the political sphere.