INTEGRATION WITHOUT DETRIMENT

Independence is the most valuable possession that any people can have. In the modern world with its new challenges and threats, with the extensive spread of individual international and regional organisations, this possession acquires a special role. For Azerbaijan, which restored its independence 24 years ago and is in principle a self-sufficient country, it is particularly important not to expose this possession to any threat by becoming involved in individual organisations in order to obtain economic advantages.

In any case, the modern world is represented by economies closely integrated among themselves involving different countries. For the effective development of their national economies, some countries have given up a number of their powers in the political and financial spheres, which were for many centuries considered attributes of the independence of a state. In particular, within the framework of the European Union, a Eurozone has been set up, participation in which means a country giving up the right to have its own currency and to pursue an absolutely independent currency policy. The borders within the framework of the European Union's Schengen Agreement have practically been "erased".

The leadership of Azerbaijan is opposed to supranational super structures within different regional structures, which may restrict the right to take decisions, and prefers to build relations with other states on a bilateral basis.

For official Baku this subject has particular nuances in the light of the occupation of 20 per cent of the country's territory by Armenia. It is precisely Yerevan's aggressive policy that has become the reason for its isolation from many economic and regional projects initiated by Azerbaijan. Therefore official Baku is avoiding joint involvement with Armenia in any economic alliances presupposing close integration and the creation of a free market, since that is detrimental to Azerbaijan's policy of isolating Yerevan.

But, on the other hand, the increasing promotion of regional structures and projects is becoming an ever more important part of the development of the modern world. You see, no matter how well developed a country is, it may begin to deteriorate if it "is stewing in its own juice".

In this connection, it is becoming extremely important to thoroughly get to grips with the international organisations operating in the region to discern which one is the most acceptable to Azerbaijan.

Great Britain challenges 

the European Union

While the former countries of the socialist camp and the former Soviet states are continuing to "bang on the doors" of the European Union, Great Britain will possibly suspend its membership of this organisation. The question to which the citizens of Great Britain are to give an unambiguous answer in the second half of 2017 has already been determined: "Should the United Kingdom remain a member of the European Union?" Great Britain's membership of the European Union is the most graphic example of the rise and growth of the problems in this regional organisation. Great Britain was among the countries included in the first enlargement of the European Union, being a full member of it since 1973. 

Now it is hard to imagine how Great Britain's former Prime Minister Tony Blair had hoped to go over from the British pound sterling to the single currency, the euro, in 2015. The contradictions between the EU and Great Britain have reached their height with regard to immigration and Brussels' desire to reform the tax system.

It is hardly likely that the European Union will give way under pressure from British Prime Minister David Cameron and reject the conducting of reforms or restrict one of the pillars of the common market, namely the free movement of labour resources.

Incidentally, the "Front National", one of the three leading political forces in France, has stated the need to conduct a referendum, similar to that in Great Britain, on France leaving the European Union.

There is evidently no point in mentioning Greece which, right from the start, was not a driving force in the EU economy, but at the moment Greece is in general risking losing its place in the organisation. 

So, it is quite reasonable to ask whether Azerbaijan should join a European Union which has gone through the height of its heyday and is now faced with complex financial problems and political discord.

In 2004, when the European Union underwent enlargement to the east, Azerbaijan, as a country of the Southern Caucasus within the framework of the "Enlargement of Europe" initiative, was included in the EU's "New Neighbourhood Policy". So, this formed the basis for further cooperation between Azerbaijan and the European Union and boosted this cooperation to a qualitatively new level. The EU regarded this expansion as a kind of regional (eastern) dimension of its European neighbourhood policy, initiating the "Eastern Partnership" programme with the participation of Azerbaijan, Armenia, Georgia, Belarus, Moldova and Ukraine. The programme's ultimate aim is the signing of an agreement on associate membership of the EU and participation in the organisation's free trade zone.

But, in its striving to expand, the EU either deliberately or accidentally forgot about Russia, which remains the main force in the area previously occupied by the Soviet republics. Many countries have learned a lesson from the recent events in Ukraine. When the leadership in Kiev signed the association agreement with the European Union, it was in actual fact deprived of Crimea and brought the Ukrainian people to the brink of civil war.

Official Baku's standpoint assumed its final outline at the "Eastern Partnership" summit in Riga in May, when a proposal was put forward on bilateral strategic cooperation between Azerbaijan and the European Union in exchange for an association agreement. Within the framework of the strategic cooperation official Baku would not have to take upon itself any commitments to European standards. These are the standards that might lead to limiting the access of Azerbaijan's goods to the large Russian market and also restrict the activity of Russian companies in Azerbaijan.

Russia's attempt to protect the CIS's economic space

During the various business forums and conferences, Russian businessmen have not concealed their irritation regarding the activity of western companies in the area of the CIS [Commonwealth of Independent States]. In a private conversation, the representative of a major Russian metallurgical company did not hide the fact that EU and US regulations are not allowing them to develop their business in these markets. At the same time, he promised that it would not be easy for western companies to do business throughout CIS territory, since this market is controlled by Russia and the rules of the game will be established by Russian companies.

But it is one thing for Russian business circles to make a statement, while the actual situation is quite different. In particular, it is probably only people of the older generation who can remember the Russian Tupolev, Antonov and Yak aircraft and so forth. Now not only the former Soviet republics have stopped buying Russian aircraft, after purchasing "Boeings" and airbuses (European Union), but even Russian airlines too. For the moment VAZ, and to a certain extent GAZ, vehicles can still be seen on the roads in the former Soviet republics, while "Moskvitch" cars will soon only remain in the memory of the generations who saw the [Russian] film "Diamond Arm" ["Brilliantovaya Ruka"]

But the Russian leadership will not give up on its attempts to shield their market from the influence of the West by creating a single market within the framework of the Eurasian Economic Union [EAES]. In spite of the evolutionary process from the Customs Union to the EAES since 1 January 2015, this structure is only at the "in the bud" stage in coming into being. In particular, the EAES, like the EU as well, envisages the free movement of goods, capital and manpower and the pursuit of a single economic policy.

Nothing is envisaged for the next decade regarding the pursuit of a unified economic policy, since the setting up of the supranational bodies is taking too long to get going. This applies to the Eurasian Economic Commission and the Eurasian Economic Court, the decision on which has not been fully implemented, so it has had to be postponed for an unspecified period. Belarusian President Alexander Lukashenko has rigidly opposed the creation of supranational structures and a single currency, having stated that artificial political structures are not permissible.

Besides this, Armenia is also a member of the Eurasian Union along with Russia, Kazakhstan, Belarus and Kyrgyzstan. It can therefore be said with a great deal of probability that Azerbaijan's path to this structure is barred until the Nagornyy Karabakh conflict has been settled and the occupied territories have been liberated.

Boundless integration prospects offered by SCO 

The Shanghai Cooperation Organisation (SCO) may well be of great interest to Azerbaijan. Its potential for integration may exceed the potential of many international organisations on that level.

At the present time, the SCO members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Mongolia, India, Iran, Pakistan and Afghanistan have been granted observer status. Belarus, Sri-Lanka and Turkey have SCO "dialogue partner" status.

The overall area covered by the SCO member-states is equal to 30.2m sq. km, which is three fifths of the area of Eurasia, and the population is 1.5bn, i.e. a quarter of the entire population of the globe.

Moreover the above-mentioned figures for the territory and especially for the population will soon markedly increase. The normative base of the SCO relating to its expansion has been formed, the prospects for states, including India and Pakistan, to become new members are good. Iran has not lost hope of becoming a full member of the organisation.

We would like to note, that, in view of the composition of the organisation, it is hardly likely that either Russia or China will be able to pursue their own political leadership ambitions alone. 

It is most likely that they will directly try to find and implement major investment projects aimed at developing the region's infrastructure. Should Azerbaijan become an SCO member, even in the capacity of a "dialogue partner" or an observer, this would allow it to take an active part in future large-scale projects on a big part of the Eurasian continent.