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Russia-led Reforms Foster New Links Within CIS

Russian President Vladimir Putin has not come back empty-handed from two just-concluded regional summits, where members of the Commonwealth of Independent States (CIS) agreed to forge closer economic links and new defense ties ina region where Russia hopes to revive foregone leverage in order to offset growing Western influence.

Leaders from member states of the Eurasian Economic Community met Wednesday in Moscow to discuss economic integration within the bloc that links the former Soviet republics of Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Belarus.

The leaders discussed currency cooperation and harmonization of customs tariffs, moves seen as expressions of willingness to build a free trade zone and customs alliance.

Analysts have likened the summit's results to "a beacon of light" for CIS economic integration, which had been stuck in low gear.

Russian bankrolling

A sign of growing Russian input into the economic ties linking CIS members, Russia and Kazakhstan agreed to create a regional investment bank with a charter capital of US$1.5 billion, the bulk of it coming from Russia.

The bank, expected to be operational before the end of the year, will be headquartered in Alma Ata, Kazakhstan, and run a branch in St. Petersburg, Russia.

"This is not a closed bank. It will be open to shareholders from other CIS countries," Putin told the participating leaders.

The bank's financing of joint projects will bring tangible benefits to member countries and could be a magnet for both existing members and those former Soviet republics outside the bloc, analysts said.

At the summit, the leaders touted further integration, saying they had no shortage of examples to show how well the bloc has fared in boosting economic growth in member countries.

Putin, who has long urged the bloc to spearhead integration efforts in the region, said the bloc is developing dynamically and has become more attractive to other former Soviet republics.

Kazakh President Nursultan Nazarbayev said all of the bloc members' economies were on the rise in the 2000-2004 period, with Belarus growing at an annual rate of 6.5 percent, Kazakhstan at 10.3 percent, Kyrgyzstan at 4.8 percent, Russia at 6.2 percent and Tajikistan at 9.7 percent.

Trade among members of the bloc totaled US$28 billion last year, representing a 40 percent increase over 2003, he said.

Holding members together

Russia, wary of US military presence in Central Asia, NATO's eastward expansion and the change of government in some former Soviet republics, has sensed the urgency of reform within the CIS to hold members tightly together with a new strategy.

Russian Defense Minister Sergei Ivanov has stressed the Collective Security Treaty Organization (CSTO) would be the core of political and military cooperation among CIS members. The CSTO is comprised of Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Armenia.

Under the agreements signed at the CSTO summit Thursday, member states plan to deploy a unified air defense system and build collective rapid reaction forces in Central Asia. These forces could be used in peacekeeping operations, Putin said.

The leaders decided to create an interstate commission on military-economic cooperation, which Putin said will promote closer ties between member states' defense industries.

Russia, the leading power in the region, agreed to train military personnel for member states and sell military equipment at a discount.

"Moscow is gradually but confidently distancing its contact with the CIS on a general level and increasingly focusing its attention on cooperation with major partners" in the region, including regional blocs like the CSTO, said Vladimir Muhin, an observer with the Nezavisimaya Gazeta daily.

(Xinhua News Agency June 25, 2005)

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