Putin seeks power in trade

Envisions Moscow-led alliance of former Soviet states

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ALMATY, Kazakhstan — Russian Prime Minister Vladimir Putin has a vision for a Soviet Union-lite he hopes will become a new Moscow-led global powerhouse. But, his planned Eurasian Union won’t be grounded in ideology: This time it’s about trade.

The concept of regional economic integration may be losing some of its allure in Europe, where a debt crisis is threatening the existence of the eurozone.

But some countries across the former Soviet Union, still struggling economically 20 years after becoming independent, are embracing Mr. Putin’s grand ambition.

Russia has moved one step toward this goal under an agreement with former fellow Soviet republics Belarus and Kazakhstan that now allows the free movement of goods and capital across their common borders.

As Mr. Putin envisions it, the still-hypothetical union eventually will stretch from the eastern fringes of Central Europe to the Pacific Coast and south to the rugged Pamir Mountains abutting Afghanistan.

The drive to somehow reform at least a husk of the Soviet Union has been around since 1991. The Commonwealth of Independent States, which loosely brings together 11 of the original 15 republics, was an early attempt that never amounted to much more than a glorified alumni club.

It was Kazakhstan’s President Nursultan Nazarbayev who first raised the notion of a Eurasian Union in the early 1990s, but the idea was too premature for nations busy forging their own delicate statehoods.

Mr. Putin was president from 2000 to 2008, and intends to regain that position in a March election. A wave of protests that began after a fraud-tainted parliamentary election in December is posing the first serious challenge to Mr. Putin’s authority, but his hold on power still seems secure.

In anticipation of a new six-year term as president, Mr. Putin has made forming a Eurasian Union by 2015 a foreign policy priority.

He is promoting the union as necessary for Russia and its neighbors to compete in the modern global economy. His broader goal is to restore some of Moscow’s economic and political clout across former Soviet space and thus strengthen Russia’s position in the world.

If the poorer prospective members are clamoring for Mr. Putin’s union so as to become Moscow’s financial beneficiaries, as was the case under the Soviet Union, they may be sorely disappointed. Russia has in recent years taken a more pragmatic line when extending its largesse, and that stance is expected to remain largely unchanged.

“Some years ago, Russia came to the position that assistance to former Soviet republics should be monetized,” said Ivan Safranchuk, an associate professor at the Moscow State Institute of International Relations.

Mr. Safranchuk said this meant that Moscow issued lines of credit and then sold countries oil, gas, electricity and military hardware at discount prices.

That strategy has brought Russia closer to gaining control over energy infrastructure in Ukraine, Belarus and Kyrgyzstan. While giving Moscow economic leverage over its former subjects, this approach has precluded the exorbitant spending pressure that helped bankrupt the Soviet Union.

The agreement to form a “common economic space” that went into effect Jan. 1 gives Russia up to 30 million new customers in Belarus and Kazakhstan, while these countries gain greater access to Russia’s market of more than 140 million people. The risk to Russian manufacturers is the relatively lower cost of production in the other two countries, which could potentially drive them out of business.

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