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

Oxana Karnaukhova
European Union is including closer cooperation with the CA5 on its agenda for global leadership.
Russia’s renewed interest in the region was embodied by its joining the Central Asian Cooperation
Organisation in 2004. However, at that time, the emerging competition with the Eurasian
Economic Community led to CAC’s merger with EuroAsEC in 2005 and further fragmentation of
the Central Asian geo-economic landscape. Central Asia is thus becoming involved in the arena
of competition between external powers.
The collapse of CACO in 2005 led to a deterioration of cooperation between the Central Asian
states and the disappearance of the regional dialogue format. Whereas the functioning of
integration structures – albeit ineffective – facilitated regular meetings, negotiations and
exchanges of views between the states, after 2005 the leaders of the Central Asian states meet
only during bilateral visits or summits within the CIS, which was conceived as a platform for
preserving historical-cultural, educational and humanitarian dialogue, but did not include effective
mechanisms for economic (re-)integration. This widens the gap between the states, reduces
the chances of finding rational solutions to the most pressing issues on the regional agenda and
paralyses cooperation between the countries of the region (Krapohl/Vasileva-Dienes 2020).
Serving as a model for successful integration and being a recognized leader, the European Union
is still a relatively new player in the region. It had limited contacts with the Central Asian states
and a few interests in close interactions before the 2000s (European Commission 1995). By
nowadays the engagement is seen as connected with different development projects for funding
and recently added security concerns including China (EU Security Strategy 2007; European
Council 2012).
Since the independence of Central Asian (CA) states, the EU has gradually intensified its
involvement in the region through the Official Development Assistance (ODA). Following the
OECD dataset, the ODA has been distributed unevenly across the CA states. The difference
reflects the selectivity of targets and specific interests of the donor. One of the largest recipients
of the EU institutions’ ODA appears to be Kyrgyzstan with about US $593 million of grants and
loans by 2018 mainly aimed at the logistic projects. Tajikistan allocated $622 m. for education,
public health, and rural development, followed by Uzbekistan – $263 m. Kazakhstan has gained
$300 m. for development assistance. Finally, the smallest recipient of the EU ODA is Turkmenistan
with around $104 m. assistance 1 . Thus, the EU is one of the major donors for the region with
competitors from Russia, the USA, and China. For comparison, Russia allocated for the Kyrgyz
Republic about $1,042 bn., naturally increasing its investments after 2015 via the Russian-Kyrgyz
Development Fund, while Tajikistan was the primary main assistance object for the USAID.
The Strategy 2007 was an agenda for global and comprehensive positive leadership promotion,
whose efficiency was driven by the “the political goes first” idea: a state willing to apply and be
qualified for economic assistance has to answer to strict terms of the Europe-oriented political
1 Source: OECD, Aid (ODA) disbursements to countries and regions.
42 Wirtschaft und Management · Band 33 · März 2023