The EU, the EEU, and the War in Ukraine: Political Risks and Management Options

Oxana Karnaukhova
These discussions are even more relevant regarding the so-called economic sovereignty of
the state, the exercise of its regional or global leadership and the mechanisms of geopolitical
and geo-economic decision-making. As defined by Keohane and Nye (1977), ‘sovereignty is the
exclusive right to determine the framework of rules, regulations and policies within a territory’.
According to institutional and poststructuralist accounts, the state is seen as anchored in a wide
cultural environment (Anderson 1986; Spruyt 1994). Sovereignty is viewed as a social status
recognized that legitimates states to make decisions on behalf of community as supreme and
independent of outside authorities (Biersteker/Weber 1996; Jarvis/Paolini 1995). There is also
external sovereignty, which is caught by the process of legitimation through recognition from
outside. As Charles Doran (1989) noted, ‘international political role reflects the set of foreign
policy interests that a state has actually achieved’. These interests are located in-between of
national capabilities and aspirations, and the willingness of other recognized members to allow
the state to achieve its interests. Thus, these are interstate relations within the international
system.
Autonomy of internal and external decision-making and governance are tightly linked with
power control and policy efficiency, and such policy efficacy as operational sovereignty is not
constrained by external forces (Waltz 1969; Keohane 1993). Globalization questions the primary
idea of governance based on geographical jurisdiction that is state sovereignty. Multinational
enterprises play a central role in the process of such alienation as a result of digitalization and
of the rise of networked strategic alliances, increasing importance of transnational actors and
further regionalisation.
In this paper the particularities are questioned of the sovereignty exercise in developing economies
and the extent to which economic sovereignty interfaces with complex regionalisations,
using Central Asia as an example. The case of Central Asia is chosen as experiencing both
pressures from the multi-vector integration projects of the EU, EAEU and One Belt One Road,
and internal gravitational pressures. The widespread idea of the “sunset” of state sovereignty
is investigated as a strategic decision-maker in the external economic policy, as well as the
possible implications for multinational corporations as a necessary link in the regional leadership
strategy undertaken in emerging economies.
First, the terms of economic sovereignty, leadership, and power are defined, which are frequently
used in the vast majority of literature on regionalism transformations, nation-states positioning
and contested integrations. Next, the chapter examines the geopolitical context in which
Central Asian economies operate and the risks faced by companies. Finally, the implication of
the globalization and regionalization on Central Asia strategy and the possible impact of multivectoring
on MNCs will be examined.
38 Wirtschaft und Management · Band 33 · März 2023