Labour Mobility in the EAEU: Results and Power Dynamics

1 Introduction

The Eurasian Economic Union (EAEU) was founded by Belarus, Kazakhstan, and Russia in May 2014 as an extension of multiple integration initiatives in the post-Soviet space. The Union, nevertheless, differs from the preceding regional projects of economic integration by its scope, promoted goals and pace of development (Dragneva and Wolczuk 2017). As stipulated in the Treaty on the Eurasian Economic Union (thereinafter – Astana Treaty), which established this economic organization, one of its major aims is “the creation of common market for goods, services, capital and labour” (TEAEU 2015, Art. 4, 6). With this purpose, in January 2012, the Union set the framework of the Common Economic Space (CES), which up to date became a market of more than 180 mln consumers (Eurasian Economic Commission 2018). Moreover, the Union set the goal to advance the common market as much as possible by 2025, thereby creating a new economic entity of its own (Vinokurov 2017).

Labour mobility is a significant factor for the EAEU to achieve its ambitious goals of integration. Emphasizing the importance of the labor market, Barslund and Busse (2016) assert that “a dynamic labour market that is unfettered by national boundaries and where labour and skills are allocated more efficiently is important for companies’ ability to grow and invest, not least in light of the increasing competition from other regions of the world” (1). In accordance with this, common labour market is one of the few policy areas where the newly-established EAEU could achieve tangible results (Vinokurov 2017). Schenk (2018) agrees, stating that “from the perspective of migration and labour market integration, the agreement is far more radical than anything that has existed since the fall of the Soviet Union” (164). In general, regulations on labour mobility accomplished substantial results in tearing down the barriers affecting common labour market within the EAEU.

However, while most of the provisions on the labour mobility have been realized in practice, there are still some obstacles posed by the member states in the form of coordination problems and contradicting policy implementations (Vinokurov 2017, Schenk 2017). These hindrances raise the question of to what extent labour mobility, along with other common market implementations, is being prioritized and aimed by member states. As such, the present paper argues that while the field of labour mobility in the EAEU is certainly present and rather developed compared to other policy areas, member states still do not fully realize the EAEU obligations at the domestic level. The early mutual assistance among the member states is the result of their recognition of the benefits from cooperation rather than the true incentive of establishing deep economic integration. Even though the power in the field of the labour mobility is delegated to supranational institutions of the Union, the member states are not willing to cede their sovereignty to these bodies, which can be seen from the institutional arrangement of the Union in this policy area, individual cases of the divergence from the Union’s principles, as well as general securitized rhetoric toward migration policy.

2 Analytical Framework

Selecting an appropriate analytical approach for studying such a young integration project as the EAEU is anything but easy. In analyzing the EAEU’s case of regional integration, scholars have been resorting to the established frameworks for studying its accomplished European counterpart – the European Union (Roberts and Moshes 2015). Such convergence between the two major unions is also applicable to the present research since the EAEU largely echoes the EU’s integration experience and shares similar principles and canons such as the “four freedoms” in the common market, harmonization, non-discrimination, etc. (Kondrat’eva 2016). As such, this paper will utilize the principal-agent approach, and on a broader scale, its application by the liberal intergovernmentalist perspective.

As Kassim and Menon (2003) explain, the principal-agent dyad is formed when one side, the principal, engages in an agreement and delegates its responsibility toward a set of functions to a second party, the agent. The reasons for such delegation are usually to save transactions cost, secure expertise, tackle the problem of collective action, and mitigate the bargaining process (Kassim and Menon 2003). In the case of the EAEU’s labour mobility, the five member states agreed to delegate their authority to the supranational body of the Eurasian Economic Commission (EEC). The Commission, “a permanent regulating body of the Union” (TEAEU 2015, Annex 1), is provided for the powers in 20 areas, among which is labour migration. Apart from the Department of labour mobility within the Board of the Commission, there are two additional consulting committees on this policy area (Aliev 2015).

In its deployment of the principal-agent approach, Liberal Intergovernmentalism states that supranational institutions are “deliberate instruments to improve the efficiency of bargaining between states” (Moravcsik 1993, 507). Only because the principals, in our case, the five member states, understand the benefits of long-term cooperation, they delegate the functions of agenda-setting and external representation. However, as shown in the following passages, despite the formal delegation of powers to the Commission, the Commission is still a relatively weak institution by its structure. The Member States are still much in power in the area of labour mobility, which is illustrated by cases of their contradicting policy implementations.

3 Policy Output

3.1 Cases of successful integrational policy implementations

As was stated above, the Astana Treaty’s entry into force created a number of positive implementations toward greater economic integration and enhanced labour mobility in specific. Section XXVI “Labour Migration” of the Astana Treaty requires the member states to cooperate on their policies to recruit and involve workers from other member states (TEAEU 2015, Art. 96(1)) and prohibits the application of any restrictions with the aim of securing their national labour markets (TEAEU 2015, Art. 97(2)). A tangible accomplishment is that labour migrants from the member states and their family members are exempt from the requirement to register within 30 days after entering the territory of another member state (TEAEU 2015, Art. 97(6)), the obligation that applies to workers from non-members of the EAEU. The Treaty also utilizes the principle of mutual recognition by requiring the countries of employment to accept workers’ education and qualification certificates without carrying out regular procedures of recognition determined by their national legislation (TEAEU 2015, Art. 97(3)). Similarly, licensing and quota compliance regulations have been eliminated (Aliev 2015). These regulations enabled the nationals of the member states to perform labour activities in other member states more freely.

Apart from the obligations on the free movement of workers and free provision of services, the Astana treaty has also contributed to the policy output in the social security domain. For example, Article 98(4) stipulates that migrant workers and their family members are subjects to emergency medical care and other types of medical treatment. Also, point 8 of the same article ensures that children of workers from member states who are residing with their parents on the territory of another member state are entitled to receive education and visit pre-school institutions along with the nationals of the state of employment (2015). Finally, the Commission recently issued a separate special agreement that is aimed to resolve the technically complicated problem of pension mobility. The “Agreement on Pension Benefits for Working Population of the Member States” formulates and enhances the reciprocal recognition of conditions and procedures of pension system within the Union (EEC 2019). The Agreement is an important milestone in the area of labour mobility because up to date, each member country has its own legislation on pension provision (Ibid 2019), which contravened the freedom of movement principle. These implementations did lead to developments in the EAEU’s common labour market. According to the Federal Migration Service of Russia, by January 2016, the number of Kyrgyz migrants in Russia increased by 2% compared with January 2015, while for other non-member CIS states, the number decreased, with Uzbek migrants felling by 4.1% and Tajik migrants decreasing by 3.8% (Inozpress.kg 2016). These policy implementations illustrate the results of the member states’ delegation of power to the Commission and the extent of their cooperation in the policy of labour mobility.

3.2 Cases of contradicting policies?

As much alluring is the policy output since the establishment of the EAEU, it is difficult to ignore the gaps between the obligations stated in the Treaty and several domestic laws and securitized policies pursued by the major members of the Union – Russia and Kazakhstan. While there is overall progress toward common labour market, these countries implement migration restrictions that contradict the open labour market policies.

Specifically, it concerns the problem of the member states’ data collection on migration. Russia and Kazakhstan, as the largest migrant-receiving countries in the Union, do not employ decisive and effective measures to detect and prevent illegal labour. For example, Schenk (2017) discusses the case in 2015 when citizens of the new-entered to the Union Kyrgyzstan could not benefit from the EAEU provisions and were subjected to the previous procedures of patents in Russia. Kyrgyzstan’s inclusion in the Union and its provisions took place simultaneously with Russia’s major campaign of creating governmental migration centers to tackle the security-related problems of migration from other countries. Kyrgyz migrants, however, were not aware of the proper practice of registering their residence or obtaining a patent to work. Thus, many of them went to work at the informal market, which hinders monitoring of the policy. Furthermore, employers in these countries might be reluctant to sign formal contracts because it would oblige them to pay official taxes and social security insurance (Tyryukanova 2008). In Kazakhstan, the official contracts of migrants must be managed by the migration policy; however, this agency does not provide any data within the framework of the EAEU (Schenk 2017). Therefore, while formally adhering to the principles of the Treaty, the member states neglected this important aspect for successful implementation of the free movement of labour.

Even more acute divergence from the principles set out in the Astana Treaty happened between Kazakhstan and Kyrgyzstan in 2015-2016, as described by Schenk (2017). As was stated above, Article 97(6) of the Treaty exempts nationals of members states from the requirement to register in another member state within 30 days (TEAEU 2015). However, even after Kyrgyzstan entered the Union in 2015, the government of Kazakhstan did not undertake any legislative alterations to comply with this rule. Only in February 2016, Kazakhstan extended the 5-day period of registration for citizens of Kyrgyzstan. However, workers’ family members who do not perform labour activities still must register within 5 days. The issue of extending this period is still under negotiation (Schenk 2017). These individual cases of coordination problems and non-convergence to the claimed goal of establishing Common Economic Space indicate that the policy of labour mobility is still underdeveloped and not pioneered among the member states.

4. The Commission’s Role

The very fact of the possibility of such non-compliance within the EAEU could be explained by the structure of the institutions that are stated to enforce and facilitate coordination and compliance. According to the principal-agent model, the five member states have conferred their authority in labour mobility to the EEC so that it could perform their functions in a more competent and effective manner. Nevertheless, delegating their competencies, the founding members efficiently retained their power and control over the supranational agent. As Roberts and Moshes (2015) argue, “the Eurasian Commission from the outset was designed to be a much less ambitious supranational body than the official discourse surrounding the EAEU suggest, reflecting the fact that member states were not prepared to give it anything more than limited competencies” (548). Indeed, the institution that oversees the labour migration is rather intergovernmental than supranational. First, the members of the Board of the Commission are nominees by the national governments (TEAEU 2015, Annex 1(40)). Also, the decisions by the EEC are subjects to veto by the Supreme Council, which is comprised of presidents of the member states. Finally, and most importantly for the behavior of non-compliance discussed above, there are very few enforcement mechanisms provided for the Commission. Compared to the EAEU’s European counterpart, the EU, where directives of the European Commission must be transmitted to the national laws (TEU 2007), the suggestions and orders of the EEC are not mandatory for the EAEU’s member states (TEAEU 2015). The supranational body has only powers to monitor, and develop proposals; however, apparently, it does not have an effective check and balance mean to prevent members such as Russia or Kazakhstan from non-compliance.

5. The Member State’s Leverage in Labour Mobility

The relative success of implementations in the area of labour mobility is therefore explained not by member states’ fruitful delegation of power to the Commission but by their recognition of benefits in the development of the common labour market. Indeed, each of the member states has its own individual share of leverage made possible by the endeavor. Russia, for instance, as the largest migrant-receiving country in the union needs labour in the low-qualified labour in the service sector (Schenk 2018). Accordingly, in 2017, the number of working migrants from Kyrgyzstan in Russia has risen to 376,863 people as compared to 79,375 in 2012. Similarly, after Armenia’s entrance to the Union, the number of Armenian citizens increased up to 232,247, compared to 90,549 in 2012 (Evraziya.Expert 2018).

Other scholars such as Popescu (2014) would argue that the labour mobility initiative (and the Eurasian Union in general) is most beneficial for the migrant-sending countries of the post-Soviet region. According to the author, these countries with large numbers of the impoverished population and high levels of unemployment are economically dependent on labour migration. As Popescu states, “from their perspective the trade dynamic with Russia might not be of paramount importance, but retaining access to the Russian labour market for hundreds of thousands of migrants is a matter of crucial socio-economic stability if not survival” (17). Therefore, it can be assumed that the EAEU member states choose the path of deep economic interdependence not because of their true commitment to integration but practical economic reasons.

Moreover, labour mobility is one of the few policy areas that directly touches upon the questions of border control and national sovereignty. A popular opinion among scholars is to perceive the Union as Russia’s imperial project (Kirkham 2016, Roberts and Moshes 2015). These authors argue that the policy developments also involve political incentives and illustrate Russia’s “outward expansion”. This could be another reason why a non-Russian member of the Union such as Kazakhstan is reluctant to deep integration in this sphere. In fact, Kazakhstan’s ex-president Nazarbayev strongly opposed to the politicization of the Union. As he initially declared, “Such matters as border control, migration, security and defense, as well as healthcare, education, culture, legal aid to citizens on matters of civil, administrative and criminal law, are not related to economic integration and cannot be brought into the framework of an economic union” (Popescu 2014, 21). This supports the main claim of the present paper that while the EAEU has set an ambitious goal of a new level of integration, the member states are still reluctant to fully commit their domestic politics to this aim.

6 Conclusion

This paper used the policy of labour mobility in the Eurasian Economic Union as a platform to explore complex power dynamics within the actors and institutions of the Union. It argued that while there is a significant policy output in this policy field, it is not an indicator of further deep integration but rather an outcome of national interests of each member state. Moreover, the research revealed a gap between the EAEU’s grand principles for common labour market and member states’ performance on the domestic level. Migrant experience with governmental procedures and regulations show that while formally respecting the Treaty, the member states neglect the implementation of the policies in practice. Following the theory of Liberal Intergovernmentalism, this breach was explained by the purposeful underpower of the Commission, the main decision-maker in labour mobility, by the authoritarian member states. Finally, the paper also considered political component to this policy area, stating that labour mobility, as other areas of integration, is still dependent on the domestic intentions and priorities of the member states.

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