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International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria

CO-EA-EI The Challenges and Opportunities of Eurasian Economic Integration

Project Proposal

DRAFT, 3 August 2013

Project Summary

The world economic crisis has accelerated fundamental transformation processes on the geopolitical scene, particularly in the area of international economic relations. One of them is translocation of the center of the global economic power to the Asia-Pacific region, and relative shrinkage of the ‘weights’ of the traditional world leaders (USA, EU and Japan). At the same time, the current crisis has highlighted defects of the present EU integration model. The accelerated development of integration in the post-Soviet space (in particular the establishment of the Customs Union and Single Economic Space, comprising Russia, Belarus and Kazakhstan with prospects of widening to other states) can also be considered as a side-effect of the global crisis.

In spite of diverging political systems, existing rivalries and mistrust between major Euro-Asian actors (nation-states, international and supranational groupings), the mobilization of Eurasia's gigantic potential in human capital, natural resources, infrastructure development, education and technology could contribute to recovery of the global economy and to improvement of the living conditions for billions of people. In this context, the Eurasian integration isrepresents a crucial political challenge. At the same time, the Eurasian continental integration phenomenon is still under-researched. Evidently, there is a need to conceptualize and understand Eurasia and the Eurasian integration beyond the conventional frames of traditional ideologies, geopolitical and cultural interpretations.

Due to its geographic location, the post-Soviet space is bound to play the key role in the continental processes of economic integration. The term “Eurasia” is often used as a synonym for the post-Soviet space. However, Eurasia is not the same as the post-Soviet space. Its borders cannot be regarded as fixed – once and for ever – by the Soviet past. Whereas the post-Soviet space can indeed be the obvious region for integration in certain aspects, other options might envision different combinations of participating countries.

The CO-EA-EI research team intends to analyze the issues of economic integration in both a truly trans-continental dimension (“from Lisbon to Shanghai”, or Greater Eurasia) and a sub-continental dimension (“from Lisbon to Vladivostok”). The continental Eurasian integration implies radical reinforcement of economic, political and social interactions between the regions ofon the Eurasian supercontinent – Europe, Central and Northern Eurasia, and East, South and WestWestern Asia, going beyond liberalized

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trade in goods and services to the free movement of financial and human capital, visa-free regime, elimination of non-tariff barriers, technological and R&D cooperation. Such multi-dimensional integration will be referred astoas DCFTA (“deep and comprehensive free trade agreements).

The sub-continental dimension of the project embraces the enlarged European Union, the candidates and potential candidates for the EU membership in Southeast Europe, Ukraine, and the Customs Union of Russia, Belarus and Kazakhstan. This is a highly diverse – both economically, culturally and politically – group of countries on the Euro-Asian continent. All these countries share, notwithstanding the existing differences, a common European history with all associated problems, contradictions and development challenges. In the post-Soviet space and in the enlarged European Union there is frequently a profound misunderstanding of the essence of the integration projects, often highlighted by the current economic crisis. EuropeThe European Union and the West in general have viewed the Commonwealth of Independent States (CIS) and, recently, the Single Economic Space (SES), as products of the awakened “Russian imperialism”. The Europeans find it difficult to comprehend how deeply rooted are the multiple cooperation ties inherited from the Soviet (and even pre-Soviet) past, and how vital is their role for the economic modernization and sustainable development in Russia, Belarus, Kazakhstan and Ukraine. Nevertheless, the European and post-Soviet integration processes should not be viewed as mutually exclusive. On the contrary, the CIS regionalism might become an important step towards integration of the post-Soviet space andwith the European Union in the future. The Customs Union of Russia, Belarus and Kazakhstan (with its prospects of ‘widening’) can become a more effective, stronger and stable partner for the EU than the collection of these individual countries. It can also provide additional stimuli to launching a dialogue on common infrastructures and canother areas of mutual interests; it can streamline and even partially adopt European norms and standards. Apart offrom varying scales, the EU-CU-Ukraine region and even more so the Greater Eurasia widely differ also in levels of economic integration experiences, economic structures of national and supranational bodies, development levels, visions of the future and many other aspects. Analysis of these two highly different regions under the umbrella of the CO-EA-EI project will allow the CO-EA-EI research team to feel the ‘boundaries’ of the potentially applicable economic integration patterns in Eurasia. Despite strong differences on the opposite sides of these ‘boundaries’, the two regions have a number of common systemic features – diversification in the economic, governance and social structures, diversification in the geopolitical interests of the key agents, and, in parallel, common natural resources and mutual interdependencies, a common environmental challenges. A common understanding of economic integration costs and benefits will become a key to acceleration of the economic development. Understanding ways how to diminish existing conflicts of interests, finding rational cooperation patterns and prioritizing efforts towards a common development at different spatial scales will be another key challenge in the proposed research project. In order to balance the two extreme regional scales, the project will include an intermediate-scale exploratory study – an analysis of opportunities and risks ofrelated to the creation of a Lisbon-to-Vladivostok DCFTA area. The envisaged multidisciplinary approach will include economic, institutional, political, energy, infrastructure and demographic aspects of Eurasian developments. The international multidisciplinary research team at the International Institute for Applied Systems Analysis (IIASA) is in a unique position to provide an unbiased, comprehensive and balanced analysis of problems related to prospects of Eurasian economic integration and international cooperation.

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Project Timeframe January 1, 2014 – December 31, 2016 Project Team Coordinators (see Annex II for biosketches) Dmitry Efremenko, Institute for Scientific Information in Social Sciences, Russian Academy of

Sciences, Russia Peter Havlik, International Institute for Applied Systems Analysis, Austria and Vienna Institute for

International Economic Studies, Austria Dmitry Korshunov, Center for Integration Studies, Eurasian Development Bank Elena Rovenskaya, International Institute for Applied Systems Analysis, Austria Sergey Tkachuk, Scientific Center of Eurasian Integration, Russia Principal Investigators Alexander Ageev, Institute of Economic Strategies, Russia Vasily Astrov, Vienna Institute for International Economic Studies, Austria Leena Ilmola, International Institute for Applied Systems Analysis, Austria Svetlana Glinkina, Institute of Economics, Russian Academy of Sciences, Russia Yuri Gromyko, Institute for Leading Research, Russian Academy of Sciences, Russia Alexey Gvishiani, Geophysical Center, Russian Academy of Sciences, Russia Markuu Kivinen, Helsinki University, Finland Vladimir Kolosov, Institute of Geography, Russian Academy of Sciences, Russia Nadezhda Komendantova, International Institute for Applied Systems Analysis, Austria Arkady Kryazhimskiy, International Institute for Applied Systems Analysis, Austria Gerhard Mangott, University of Innsbruck, Austria Alexander Pavlov, National Institute for Development, Russia Yuri Shcherbanin, Institute for Economic Forecasting, Russian Academy of Sciences, Russia Alexander Shirov, Institute for Economic Forecasting, Russian Academy of Sciences, Russia Lidiya Shinkaruk, Institute of Economy and Forecasting, National Academy of Sciences of Ukraine,

Ukraine Alexander Shirov, Institute for Economic Forecasting, Russian Academy of Sciences, Russia Yuri Yermolyev, International Institute for Applied Systems Analysis, Austria Advisory Board Sergey Glazyev, RF Presidential Administration and Russian Academy of Sciences (co-Chair) Pavel Kabat, International Institute for Applied Systems Analysis, Austria (co-Chair) Sergey Ivanov, Executive Committee of CIS, Russia Valery Heyets, Institute of Economy and Forecasting, National Academy of Sciences of Ukraine Alexey Likhachev, Ministry of Economic Development, Russia Dmitry Mityaev, Council for Studies of Productive Forces, Russia Oleg Noginskiy, Association of Suppliers of the Custom Union, Ukraine Alexander Piskunov, Accounting Chamber of Russia, Russia

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EvgeniyEvgeny Vinokurov, Eurasian Development Bank, Russia Vladimir Yasinskiy, Eurasian Development Bank, Russia Feng Yujun, China Institutes of Contemporary International Relations, China (TBC) Participants invited, to be confirmed: Luca Barbone, Poverty Reduction and Economic Management, Europe and Central Asia Region, The

World Bank, USA Oskar Benedikt, European External Action Service, Brussels Reinhold Brender, European Commission, DG External Relations, Belgium Tomas Braennstroem, EU Commission, DG Enterprise, Brussels Igor Burakovsky, Institute for Economic Research and Policy Consulting, Ukraine Fraser Cameron, EU-Russia Centre, Belgium Marek Dabrowski, CASE, Poland Kotegawa Daisuke, Canon Institute for Global Studies, Japan Piotr Dutkiewicz, Carleton University, Canada Michael Emerson, Center for European Policy Research, Belgium Ricardo Giucci, Berlin Economics GmbH, Germany John Grey, UK Heidemaria Guerer, Ministry for European and International Affairs, Austria Shaoley Feng, East China Normal University and Valdai Discussion Club, China Geoffrey Frewer, European Investment Bank, Luxembourg Stefan Fule, European Commission, Enlargement and Neighborhood Policy, Brussels Hans-Georg Heinrich, University of Vienna, Austria Ichiro Iwasaki, Instutute of Economic Research, Hitotsubashi University, Japan Kayrat Kelimbetov, Government of Kazakhstan, Kazakhstan Johannes Linn, Emerging Markets Forum, UK Kimitaka Matsuzato, University of Hokkaido, Japan Walter Russell Mead, New America Foundation, USA Dmitriy Mezentsev, Shanghai Cooperation Organization, Russia Valeriy Muntiyan, Eurasian Economic Community of the Government of Ukraine, Ukraine Iwao Ohashi, Nomura Research Institute Ltd., Japan/Russia Micheal Pulch, European External Action Service, Brussels Richard Sakwa, University of Kent, UK Vladimir Seminozhenko, State Agency of Science, Innovation and Informatization, Ukraine Shiliang Sheng, Xinhua News Agency, Institute for Social Development of Eurasia and Valdai

Discussion Club, China Sergey Sidorskiy, Eurasian Economic Commission, Belarus Viktor Spasskiy, Eurasian Economic Commission, Russia Timur Suleimenov, Eurasian Economic Commission, Kazakhstan Bulat Sultanov, Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, Kazakhstan Dong Joo Suh, Institute for National Security Strategy, Korea Hannes Swoboda, European Parliament, Austria/Belgium Irina Tochickaya, IMP, Belarus Tomas Valasek, Centre for European Reform, UK Alexandre del Valle, Scientific Council of Geopolitics of Daedalos Institute, Cyprus and University of

Rome, Italy

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Stanislav Vassilevsky, National Academy of Sciences, Belarus Gunnar Wiegand, European External Action Service, Belgium Feng Yujun, China Institutes of Contemporary International Relations, China Observers Embassy & Permanent Mission of Korea to the International Organizations in Vienna Embassy of Kazakhstan to Austria Embassy of Belarus to Austria Embassy of the Czech Republic to Belarus European Delegation to the International Organisations in Vienna Permanent Mission of Ukraine to the International Organizations in Vienna Permanent Mission of Russia to the International Organizations in Vienna Ministry of Employment and Economy of Finland Ministry of Foreign Affairs of Russia Ministry of Economic Development of Russia

Project Motivation IIASA’s related background IIASA’s background includes

• IIASA’s coordination in the on-going research program on Prospects of Coordinated Socio-economic Development of Russia and Ukraine in the European Context, run by eight institutes of the Russian Academy of Sciences (RAS) in collaboration with Ukrainian partners under support of the Presidium of RAS (2012 – 2014)

• the workshop organized jointly by IIASA (Advanced Systems Analysis Program) and RAS, at which the above research program was presented as a background for the proposed IIASA project and the structure of the present proposal was discussed (November 17, 2012)

• the on-going project on Optimization of Resource Productivity for Sustainable Economic Development carried out jointly by ASA and Tsinghua University, Beijing, under support of the National Science Foundation of China (2012 – 2015)

• the on-going project on Integrated Modeling of Food, Energy and Water Security for Sustainable Social, Economic, and Environmental Developments carried out jointly by IIASA (Advanced Systems Analysis Program) and the National Academy of Sciences of Ukraine (NANU) under NANU’s support (2012 – 2015)

• the IIASA Eurasian Workshop “The Challenges and Opportunities of Euro-Asian Economic Integration”, at which the structure of the present proposal was discussed among the potential project coordinators, researchers, members of the Advisory Board and invited experts (June 27-28, 2013)

Project Concept Integration matrix: top-down, bottom-up and horizontal patterns

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The systemic differences between the EU-CU-Ukraine triangle and Greater Eurasia imply differences in the basic principles and modes of integration in these regions. The EU-CU-Ukraine regon has a rich history of top-down economic integration based on agreements and supranational governance institutions. Nowadays, new regional agreement-based projects are on the way. The two major regional projects – an EU-Ukraine DCFTA and a CIS-Ukraine DCFTA – are seemingly in competition. Depending on Ukraine’s choice, one of the two alternative economic structures will be established in the region; each of those will obviously have a strong impact on the wider regional geopolitical agenda. Each of the projects has its advantages and disadvantages for the key players in the EU-CU-Ukraine triangle, as well as for multiple parties beyond. A common feature of both projects is that neither of them seems to show a straight path to an equilibrium win-win state in the region. In CO-EA-EI research on the top-down economic integration, the key question will be how to optimize the overall social and economic costs and benefits through the agreement-based integration decisions in the EU-CU-Ukraine triangle to all parties concerned. Greater Eurasia, a gigantic and highly diverse socio-economic system, has – as a whole – less experience in the top-down agreement-based economic integration. Mobilization of Greater Eurasia's gigantic potential in human capital, natural resources, science, education and technology may lead to a long-term accelerated sustainable development of the region, with a significant global impact, and to the rapid improvement of the living conditions for billions of people. However, in the Greater Eurasian context, consolidated efforts in triggering economic growth and supporting technological innovations have never been undertaken systematically. Diversification of the political systems, rivalry and mistrust are strong obstacles for the realization of Greater Eurasia’s huge economic potential. Supra-continental top-down economic integration will hardly be a realistic goal in the foreseeable future. The CO-EA-EI project will therefore aim at revealing 'growing-points' or ‘triggers’ for mutual trust – providing examples of bottom-up sectoral integration projects, in which the leading regional actors can be motivated to collaborate in the near future. In these projects the individual actors' interests obviously overlap, competition is relatively low, and collaboration can rapidly produce a cumulative win-win effect, as well as to initiate a virtuous chain of technological and structural innovations distributed across the region. The economic integration processes in both the EU-CU-Ukraine region and in Greater Eurasia involve a number of common socio-economic factors (a territorial differentiation in the structures of the economy, development levels, trans-national settlement systems and communication patterns, inter-regional investment and trade flows, etc). Some of those, for example, transport corridors, logistic hubs, poles of development, act as strong material components of economic integration in both top-down and bottom-up settings. The project will consider horizontal integration patterns, which go across the scales and principles of integration. Thus, the project will develop innovative and advanced approaches to assessment of top-down (agreement-based) economic integration, bottom-up (sectoral) integration and horizontal patterns in economic integration. Methodology Methods for analysis of economic integration patterns will constitute another important area, in which the project’s studies on top-down and bottom-up integration paradigms will be integrated horizontally.

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The project’s methodological platform faces a strong challenge. The diversification of the models, assumptions and datasets that have so far been used in studies of economic integration effects in Eurasia has often led to contradictory results of the model- and data-based analyses (see, e.g., Vinokurov and Libman 2012, Dyner 2010, ATF Bank 2010, Astrov et al. 2012, Francois and Manchin 2009, Movchan and Giucci 2011, Glazyev 2011, Havlik et al. 2012 etc.). Conclusions obtained through the use of different models, assumptions and data sources are often not fully consistent, sometimes even contradictory. The proposed research project will go beyond the existing methodological paradigms and will try to diminish the existing gaps. The international multidisciplinary project team will develop and apply a new unified methodology for a reliable synthesis of the outcomes from alternative sources – both regarding data, models, and underlying assumptions. Creation and support of an integrated CO-EA-EI database will form the basis for such an analysis. Another important innovation will be the use of new integrated criteria for assessment of success of economic integration. Criteria, going beyond traditional ones, such as GDP per capita, GDP and trade growt, will include additional critical human dimensions – life expectancy, education, social mood, labour market and others. New competitive structures that may emerge due to economic integration in social, sectoral and geopolitical areas will also be taken into account. Identfying the key players involved in the integration processes, their principle interests and their behavior patterns will also form a basis for the use of the powerful game-theoretic approach. A stylized game-theoretic agent-based model will help understanding the basic features of the path, along which the selfish agents may approach the target win-win states through changing interests and forming coalitions. The complexity of the integrated socio-economic systems and the lack of common histories imply risks of failures in governance and implementation, especially in the initial phases of integration. External factors (e.g, changes in prices for energy carriers) may destabilize the new integrated systems and provoke serious economic and social losses. The proposed research will include development of a combined empirical- and theory-based risk analysis technique and its application in assessment of top-down and bottom-up Eurasian integration projects. Objectives The project’s overall goal is to explore top-down (agreement-based) and bottom-up (sectoral) models of economic integration in Eurasia, to assess their potential for launching new integration initiatives on the continental level, and to provide research-based policy recommendations. The set of the project’s objectives listed below shows the project’s strategy towards achieving its overall ambitious goals. The objectives are grouped into three categories – methodological objectives, objectives in economic and policy research, and policy objectives. The methodological objectives encapsulate the innovative features of research – systems analysis instruments for understanding the drivers of economic integration and assessing the future integration

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scenarios. The objectives in economic research and policy objectives show the project’s ambitions in carrying out policy relevant research and drawing policy makers’ attention to its results. Methodological objectives (O-01) to create a comprehensive integrated database on spatial-temporal distributions of socio-economic indicators in Eurasia (O-02) to work out criteria for comprehensive assessment of success of economic integration (O-03) to reveal existing divergences in research methodologies and inconsistencies in data and in models, and to find ways to remove the inconsistencies (O-04) to overview and analyze available regional economic integration models and to develop a unified modeling framework for socio-economic dynamics of the EU-CU-Ukraine region (O-05) to develop a game-theoretic modeling approach to assessing win-win policies in the EU-CU-Ukraine region (O-06) to develop modeling tools for assessment of prospects of sectoral integration in Greater Eurasia (O-07) to develop approaches to analysis of risks related to economic integration in the EU-CU-Ukraine region and in Greater Eurasia Objectives in economic and policy research (O-08) to summarize both the EU integration experience and the experience of the EU Eastern Partnership program (O-09) to assess the EU-Ukraine and CIS-Ukraine DCFTA scenarios and to explore other integration scenarios in the EU-CU-Ukraine triangle (O-10) to explore chances and risks of the formation of a Lisbon-to-Vladivostok DCFTA area (O-11) to analyze the prospects of three sectoral integration infrastructure projects in Greater Eurasia: energy, transport and electric power (O-12) to identify the major gaps at the state borders in Greater Eurasia (O-13) to identify the principle elements of economic integration in Greater Eurasia – communication corridors, logistic hubs, poles of development, etc. Policy objectives (O-14) to inform policy makers, key stakeholders, interested public and media about the on-going results including policy recommendations (O-15) to set up a regular Forum on the Eurasian integration for experts, policy makers, stakeholders and media from all involved regions and interested institutions (O-16) to provide a basis for expanding the project to higher-level international policy relevant research programs Deliverables (D-01) Criteria for assessment of integration in the EU-CU-Ukraine region (month 12) (D-02) A summary on risk analysis in the EU-CU-Ukraine region (month 12) (D-03) A collection of regional integration models and analysis of their inconsistencies and gaps (month

12)

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(D-04) A summary on the EU integration experiences (month 12) ((D-05(a)) Methodological description of a unified modeling framework (month 18) (D-05(b)) A unified modeling framework and its application to the EU-CU-Ukraine region (month 18) (D-06) A stylized game-theoretic model for the EU-CU-Ukraine region (month 18) (D-07) A CO-EA-EI database for the EU-CU-Ukraine region (month 18) (D-08) A report on the EU-Ukraine DCFTA scenario (month 18) (D-09) Criteria for assessment of sectoral integration in Greater Eurasia (month 24) (D-10) A report on the CU-Ukraine DCFTA scenario (month 24) (D-11) A criteria aggregation methodology (month 30) (D-12) Model-based assessment of sectoral integration in Greater Eurasia (month 33) (D-13) A summary on risks of sectoral integration in Greater Eurasia (month 33) (D-14) A CO-EA-EI database for Greater Eurasia (month 33) (D-15) A report on alternative integration scenarios in the EU-CU-Ukraine region (month 33) (D-16) A report on the prospects of integration in the field of energy infrastructures (month 33) (D-17) A report on the prospects of integration in the field of transport infrastructures (month 33) (D-18) A report on the prospects of integration in the field of electric power infrastructures (month 33) (D-19) A catalogue of the principle elements of economic integration in Greater Eurasia (month 33) (D-20) A database of inter-regional interactions and flows in Greater Eurasia (month 33) (D-21) A report on the major gaps at the state borders and policy recommendations (month 36) (D-22) A report on the prospects of a Lisbon-to-Vladivostok DCFTA (month 36) (D-23) A final report for policy-makers (month 36) (D-24) A draft for a summarizing monograph (month 36) Milestones (M-01) A CO-EA-EI Kickoff Workshop (month 1) (M-02) 1st CO-EA-EI Methodology Workshop (month 6) (M-04) Collaboration and synthesis strategy (month 6) (M-05) 1st Laxenburg Forum on Eurasian Economic Integration (month 11) (M-06) 1st CO-EA-EI Update and Planning Annual Workshop (month 11) (M-07) 2nd CO-EA-EI Methodology Workshop (month 18) (M-08) 2nd Laxenburg Forum on Eurasian Economic Integration (month 23) (M-09) 2nd CO-EA-EI Update and Planning Annual Workshop (month 23) (M-10) 3rd CO-EA-EI Methodology Workshop (month 30) (M-11) 3rd Laxenburg Forum on Eurasian Economic Integration (month 35) (M-12) Exit and expansion strategy (month 36) Project Work Plan Work Packages The project’s work plan is broken down into four Work Packages (WPs): WP1: Methodology WP2: EU-CU-Ukraine and beyond WP3: Greater Eurasia: sectoral integration

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WP4: Synthesis and policy implications WP5: Dissemination and management WP1 will focus on horizontal integration based on methodological instruments including comprehensive assessment criteria, modeling tools and risk analysis techniques. WP2 will be responsible for analysis of approaches to top-down agreements-based integration and the roles of supranational institutions in the key sectors: energy infrastructure, transport infrastructure and electric power infrastructure. WP3 will be responsible for exploration of opportunities of bottom-up sectoral integration in Great Eurasia. WP4 will be responsible for building an integrated database and formulation of the synthetic conclusions and translating them into recommendations for policy-makers. WP5 will be responsible for the project day-to-day management and dissemination of the project’s results. Table 1 shows the composition of the individual WP teams. WP1: Methodology PI: Arkady Kryazhimskiy Task 1.1: Assessment criteria PIs: Yuri Gromyko & Leena Ilmola

Task 1.2: ModelingMethodological analysis PIs: Alexander Shirov & Dmitry Korshunov

Task 1.3 Modelling PIs: Alexander Shirov & Dmitry Korshunov

Task 1.3: Risk analysis PIs: Yuri Yermolyev & Gerhard Mangott

WP2: EU-CU-Ukraine and beyond PI: Peter Havlik Task 2.1: EU experience (including Eastern Partnership program) PIs: Vasiliy Astrov & Markuu Kivinen

Task 2.2: Ukraine between the CU and EU PIs: Lidiya Shinkaruk & Svetlana Glinkina

Task 2.3: A Lisbon-to-Vladivostok DCFTA: opportunities and risks PIs: Alexander Pavlov & Alexander Ageev

Task 2.4. Political Economy of Eurasian Continental Integration. PIs: Evgeny Vinokurov, Johannes

Task 2.5. Assessment of visa-free regime between EU and Russia (CU) PIs:tbd

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Linn, Michael Emerson

WP3: Greater Eurasia: sectoral integration PI: tbd (Johannes Linn?) Task 3.1: Energy infrastructure PIs: Keywan Riahi &

Task 3.2: Transport infrastructure PIs: Yuri Shcherbanin &

Task 3.3: Electric power infrastructure PIs: Nadezhda Komendantova &

WP4: Synthesis and policy implications PI: Elena Rovenskaya Task 4.1: Database PIs: Alexey Gvishiani & Vladimir Kolosov

Task 4.2: Policy recommendations PIs: Dmitry Efremenko & Sergey Tkachuk

WP5: Dissemination and management Dmitry Efrementko, Peter Havlik, Dmitry Korshunov, Elena Rovenskaya, Sergey Tkachuk , Dmitry Efremenko

Table 1: The CO-EA-EI WP teams. WP1: Methodology (Timeframe: months 1 – 33) WP1 will focus on development of a horizontal integration methodology for analysis of prospects of Eurasian economic integration. WP1 will provide inputs to WP2, WP3, WP4 and WP5. WP1 will include three tasks: Task 1.1 – Assessment criteria; Task 1.2 – Modelling Methodology; Task 1.3 – ModelingModeling; and Task 1.34 – Risk analysis. Task 1.1: Assessment criteria (Timeframe: months 1 – 24). A goal will be to work out criteria for comprehensive assessment of the success of economic integration in Eurasia, both top-down agreements-based integration (see WP2) and bottom-up sectoral integration (see WP3). It is expected that in addition to traditional purely economic criteria such as GDP per capita, GDP and trade growth rates etc., critical human dimensions such as life expectancy, education, culture, mobility and social mood will be taken into account. The proposed criteria will be evaluated through the use ofon model-based projections generated in Tasks 2.1-2.3 and Tasks 3.1-3.3. Methods for intelligent aggregation of diverse criteria will be developed. The results of Task 1.1task will contribute to Task 4.2. Deliverables: (D-01) Criteria for assessment of integration in the EU-CU-Ukraine region (month 12) (D-09) Criteria for assessment of sectoral integration in Greater Eurasia (month 24) (D-11) A criteria aggregation methodology (month 30) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11)

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Task 1.2: ModelingMethodological analysis (Timeframe: months 1 – 33). Economic models will become the key instruments for generation of projections and integration scenario analysis. ResearchMethodological research will startfocus on development of unified methodology – the modeling framework. It will provide an overview of existing approaches of quantitative evaluation of the integration effects that wereare available today in their earlierthe world on the basis of economic and mathematical modeling: models based on a computable general equilibriumbased the approach; dynamic stochastic dynamicgeneral equilibrium models; standard models econometric models,; dynamic input-output models; gravity models; long-term economic growth models,; etc. Aa comparative analysis of the models’ all the methods according to their their capabilities toin prospectscalculations, obtaining estimates and interpretation will be conducted. A goal will be to explainunderstanding inconsistencies in the models’ outcomes and understand gaps in model-based. As a result there will be established the final understanding of the most appropriate methodology for future research. and the most likely scenarios of integration. Deliverables: (D-03) A collection of regional integration models and analysis of their inconsistencies and gaps (month 12) (D-05(a)) Methodological description of a unified modeling framework (month 18) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 1.3: Modeling (Timeframe: months 1 – 33). This task is heavily relied on the Methodological research (Task 1.2). It is expected that in result a unified modeling framework incorporatingexploration economicfrom Task 1.2 , and application of the framework to the case of EU-CU-Ukraine integrationThe CO-EA-EI database (Task 4.1) will be used to calibrate and validate the unified modeling framework. Another research direction will be design and analysis of stylized agent-based game-theoretic models showing strategic paths to equilibrium win-win situations. The models will be based on plausible hypotheses on the agents’ principal interests and their behavior strategies, and will aim to simulate processes of formation of the agents’ coalitions and emergence of new interests under different input scenarios. Task 1.2task will be closely connected to with Tasks 2.1-2.3 and Tasks 3.1-3.3 through receiving their inputsinput on the underlying assumptions and phenomena to be explored,modeled and through supplying those tasks with simulated projections. Task 1.2task will also provide input to Task 4.2. Deliverables: (D-05)(b)) A unified modeling framework and its application to the EU-CU-Ukraine region (month 18) (D-06) A stylized game-theoretic model for the EU-CU-Ukraine region (month 18) (D-12) Model-based assessment of sectoral integration in Greater Eurasia (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11)

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Task 1.34: Risk analysis (Timeframe: months 1 – 33). Economic integration promises strong advantages due to multiple cumulative effects. On the other hand, economic integration is non-separable from possible failures caused by the complexity of the new integrated systems and diversification of the interests of the key agents involved in the integration processes. Task 1.3task will focus on exploration of risks of failures in the anticipated processes of economic integration in Eurasia. The risks will be evaluated in terms of the integrated criteria incorporating both economic and human dimensions (elaborated underfrom Task 1.1). Task 1.3task will employ combined risk analysis methods including empirical assessment of probabilistic uncertainties and robust decision making techniques. Risk analysis of DCFTA and possible geopolitical alliances in the EU-CU-Ukraine region will be conducted, providing an input to Tasks 2.1-2.3. The analysis will include investigation of possible failures in governance and implementation, estimation of possible economic and social losses and assessment of the impact of the key external factors (e.g, changes in prices for energy carriers). In this context, lessons from the EU experience will be summarized. Also risks of investment failures and risks of major economic losses in sectoral integration processes in Greater Eurasia will be analyzed, providing inputsinput to Tasks 3.1-3.3. Deliverables: (D-02) A summary on risk analysis in the EU-CU-Ukraine region (month 12) (D-13) A summary on risks of sectoral integration in Greater Eurasia (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) WP2: EU-CU-Ukraine and beyond (Timeframe: months 1 – 36) WP2 will be responsible for analysis of approaches to top-down integration and the roles of supranational institutions. WP2 will provide focus on economic integration in the EU-CU-Ukraine region. WP2 will also carry out an exploratory study on prospects of development of a Lisbon-to-Vladivostok DCFTA area. WP2 will employ methodological tools developed under WP1. WP2 will include three tasks: Task 2.1 – EU experience; Task 2.2 – Ukraine between the CU and EU; and Task 2.3 – A Lisbon-to-Vladivostok DCFTA: risks and opportunities. Task 2.1: EU experience (including Eastern Partnership program) (Timeframe: months 1 – 12). The EU, a living large-scale example of economic integration, has accumulated rich experience in all aspects of governance and development – justification and implementation of economic agreements, development of supranational institutions, running massive investment projects, implementation of common industrial, social and environmental protection policies, and other. Task 2.1task will summarize the EU experience, with making emphasis of its principal achievements and drawbacks. Task 2.1task will provide a substantial input to Task 2.2. Deliverable: (D-04) A summary on the EU integration experience (month 12)

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Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 2.2: Ukraine between the CU and EU (Timeframe: months 1 – 33). This task will address a critical issue for the Eurasian integration – the role of Ukraine – by analyzing the two integration scenarios for the EU-CU-Ukraine region – the EU-Ukraine DCFTA and CU-Ukraine DCFTA (analysis of the latter will use the results of thehappening CIS-Ukraine FTA). This task will explore the advantages and disadvantages of the scenarios for Ukraine in detail. Based on the analysis and on the understanding that Ukraine’s simultaneous involvement in the two DCFTAs is hardly realistic, Task 2.2task will look for economic implications of each scenario and assess the scenarios’ timelines and acceptability for all the parties involvedconcerned. Expert-based economic assessment approaches, analysis of the EU’s experience (Task 2.1), economic modeling (Task 1.2), game-theoretic analysis (Task 1.2) and risk analysis techniques (Task 1.3) will be employed. Task 2.2 This will provide input to Task 4.2. Deliverables: (D-08) A report on the EU-Ukraine DCFTA scenario (month 18) (D-10) A report on the CU-Ukraine DCFTA scenario (month 24) (D-15) A report on alternative integration scenarios in the EU-CU-Ukraine region (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 2.3: A Lisbon-to-Vladivostok DCFTA: opportunities and risks (Timeframe: months 24 – 36). Task 2.3task will focus on an exploratory study of prospects of development of a Lisbon-to-Vladivostok DCFTA area. A goal will be to assess several free-trade-zone development scenarios with various extra elements making it deeperdeep and more comprehensive, with emphasis on configurations of the supranational governance institutions, basic features of the DCFTAs and cross-regional investment strategies. The impact of a visa-free regime will be assessed separately. A cost-benefit analysis will be accompanied by assessment of risks of failures in the economic and institutional components of the Lisbon-to-Vladivostok DCFTA area. The study will use modeling (Task 1.2) and risk analysis tools (Task 1.3). Deliverable: (D-22) A report on the prospects of a Lisbon-to-Vladivostok DCFTA area (month 36) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 2.4: Political Economy of Eurasian Continental Integration. (Timeframe: months 1 – 12). This task will focus on political economy aspects of emerging Eurasian continental integration. Although economic interdependence between Eurasian countries is increasing, any formal or informal cross-border cooperation on the continent faces significant difficulties (different concepts of regional international cooperation, asymmetries of size and development, regional and sub-regional hegemones, etc.). The project will explore the relative importance and the consequences of these and look at the optimal scale of integration and the role of supranational, national and sub-national actors in the process.

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Deliverable: (D-…) A report on the main issues of the Political Economy of Eurasian Continental Integration (month 12) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 2.5: Assessment of visa-free regime between EU and CU. (Timeframe: months 12 – 24). The study will explore the possible risks and challenges for the both sides in case of abolishment of visas between CU and EU. The experts will present their policy recommendations and develop future scenarios and visioning of visa dialogue between the parties. The research will also cover the migratory potential in the context of acquiring a visa-free regime with the EU. Finally, the common recommendations for advancing visa dialogue between the parties will be developed. (D-…) A report on assessment of effects of visa-free regime between EU and CU (month 12) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) WP3: Greater Eurasia: sectoral integration (Timeframe: months 4 – 36) WP3 will be responsible for exploration of opportunities of bottom-up sectoral integration in Greater Eurasia. A focus will be on analysis of selected sectoral areas, in which the leading regional actors will be motivated to collaborate in the nearest future. These are the areas, in which the actors' interests overlap, competition is relatively low, and collaboration can rapidly produce cumulative win-win effects – initiate a virtuous chain of technological and structural innovations distributed across the whole region and beyond. WP3 will include three tasks concentrated on particular sectoral areas: Task 3.1 – Energy infrastructure; Task 3.2 – Transport infrastructure; and Task 3.3 – Electric power infrastructure. Task 3.1: Energy infrastructure (Timeframe: months 4 – 33). A goal will be to explore possibilities for Greater Eurasia’s coordination in a strategically important issue – development of the integrated energy infrastructure. Task 3.1task will include a characterization of the key actors and interest groups, and assessment of potential costs, risks and timeframes of consolidated scientific, technological and political efforts in developing a common energy infrastructure in Greater Eurasia. Estimates for potential overall and partner-specific benefits will be provided. Task 3.1task will provide input to Task 4.2. Deliverable: (D-16) A report on the prospects of integration in the field of energy infrastructures (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 3.2: Transport infrastructures (Timeframe: months 4 – 33). Task 3.2task will focus on analysis of the prospects of development of new Eurasian transport corridors. Research will include a characterization of the key actors and interest groups, estimationestimates of potential costs and risks

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(especially investment risks), as well as estimationestimates of potential benefits in terms of growth in commodity circulation, labor market effects, and promotion of technological innovations in the transport and infrastructure sectors. An important research issue will be assessment of energy efficiency of the new transport corridors and optimization of the future transport flows at both the Eurasian and sub-regional scales. Task 3.2task will provide input to Task 4.2. Deliverable: (D-17) A report on the prospects of integration in the field of transport infrastructures (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 3.3: Electric power infrastructure (Timeframe: months 4 – 33). Task 3.3task will focus on investigation ofinvestigate prospects and social impactsimpact of formation of a common market of electric power on the EU-CU-Ukraine territory. Research will include estimationestimates of potential costs and risks (especially investment risks), as well as analysis of the impact of the new market on the price formation and availability of electricity for industries and households. Task 3.3task will provide input to Task 4.2. Deliverable: (D-18) A report on the prospects of integration in the field of electric power infrastructures (month 33) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) WP4: Synthesis and policy implications (Timeframe: months 1 – 36) WP4 will be responsible for building an integrated database, synthesizingthe overall conclusions and translating these into policy recommendations. WP4 will include two tasks: Task 4.1 – Database; and Task 4.2 – Policy recommendations. Task 4.1: Database (Timeframe: months 1 – 33). Historical data on the dynamics of the key socio-economic and financial indicators for the Eurasian region (including national accounts, trade flows, mutual investments, GDP, deflators, input-output tables, etc).; will form the factual basis in the CO-EA-EI project (in addition to nominal values, real values will be collected/estimated when possible). Task 4.1. This task will include (i) investigation of the sources of data, which have been referred to in the literature devoted to analysis of economic development in Eurasia; (ii) exploration of the databases that have been used by the CO-EA-EI partners for their own purposes; and (iii) design of an integrated CO-EA-EI database, equipped with intellectual data representation tools including GIS and tools for incorporating model-based projections under various scenarios. In addition to raw data, the CO-EA-EI database will include the integrated assessment criteria developed under Task 1.1, data on the key actors and interest groups (provided by Tasks 2.1-2.3), and data on sectoral integration projects (provided by Tasks 3.1-3.3). A special attention will be paid to inconsistencies/incompleteness in data. It is anticipated that harmonization and streamlining of inconsistent data sets will be the major research challenge. The CO-EA-EI database will be used to support modeling (Task 1.2) and risk analysisanalyses (Task 1.3).

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Task 4.1task will also include collecting and analyzing data on territorial factors and premises of economic integration in Greater Eurasia. This research direction will include (i) creating a catalogue of the principle material elements of economic integration in Greater Eurasia – transport corridors, logistic hubs, and poles of development (for this purpose, existing territorial databases and the European Spatial Observatory Network’s studies will be used); (ii) revealing the major gaps in the values of the key socio-economic indicators at the state borders in Greater Eurasia and understanding policy measures needed to harmonize socio-economic development in neighbouring regions; (iii) creating part of the CO-EA-EI database, presenting information on inter-regional interactions and flows between the countries and regions in Greater Eurasia. Deliverables: (D-07) A CO-EA-EI database for the EU-Ukraine-Russia region (month 18) (D-14) A CO-EA-EI database for Greater Eurasia (month 33) (D-19) A catalogue of the principle elements of economic integration in Great Eurasia (month 33) (D-20) A database of inter-regional interactions and flows in Greater Eurasia (month 34) (D-21) A report on the major gaps at the state borders and policy recommendations (month 36) Contributions to Milestones: (M-01), (M-02), (M-04) – (M-11) Task 4.2: Policy recommendations (Timeframe: months 6 – 36). Under Task 4.2, resultsResults from WP2 and WP3 will be synthesized and translated into brief and clear policy recommendations. Deliverables: (D-23) A final report for policy-makers (month 34) (D-24) A draft for a summarizing monograph (month 36) Contributions to Milestones: (M-03), (M-12) WP5: Dissemination and day-to-day management (Timeframe: months 1 – 36) WP5 will be responsible for facilitating the dissemination of the project’s results and for day-to-day management of the project. The dissemination strategy will be based on the following principles:

• currentCurrent results, events and other relevant information will be announced on a frequently updated CO-EA-EI web page set up at the IIASA web site

• each of the WP1, WP2 and WP3 teams will submit at least one paper to a scientific journal and give at least one presentation at an international conference/workshop every year

• a special report will be delivered to policy-makers • the project’s results will be summarized in a monograph • atAt three Laxenburg Forums on Eurasian Economic Integration the project’s findings and policy

recommendations will be presented and discussed with broad international audience of experts, policy-makers, stakeholders and media

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The managementManagement strategy will be based on the following principles:

• theThe project will seek to develop an active synergy between research, dissemination and policy making

• atAt three CO-EA-EI Methodology Workshops, the project resarch team will discuss in-depth the project’s methodology and assumptions, and their influence on the results

• atAt two CO-EA-EI Update and Planning Annual Workshops, the project’s objectives and intermediate results will be overseen by the project research team; adjustments will be made if necessary

• byBy the end of the project’s lifetime, an effort in expanding the project to the EU level will be undertaken

WP5 will be responsible for organization oforganizing all the aforementioned workshops, collection of materials for the deliverables and policy reports, organization of the publication of the summarizing monograph, creation and maintainance ofmaintaining the CO-EA-EI webpage, management of the information flows across the WP1, WP2, and WP3 and WP4 and between the CO-EA-EI research team and CO-EA-EI Advisory Board. Contributions to Milestones: (M-01) – (M-12) Project Steering The WP5 coordinators will perform overall project management. The PIs of WP1, WP2, WP3 and WP4WP PI will be responsible for the fulfillment of the tasks of those WPs and for communication with the WP5 team (the coordinators) on behalf of theirthe WP teamsteam. The WP PIs will exchange in data and in scientific results across the WPs; present the WP’s results for the coordinators’ approval and progress report at the CO-EA-EI Update and Planning Annual Workshops. The Advisory Board will assess the project’s results and provide scientific advice to the CO-EA-EI research team. Project Timeline Table 2 shows the project’s timeline. WP1 Task 1.1

Task 1.2 Task 1.3

WP2 Task 2.1 Task 2.2 Task 2.3

WP3 Task 3.1

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0 3 6 9 12 1

Task 3.2 Task 3.3

WP4 Task 4.1 Task 4.2

WP5 Table 2: The project’s timeline (in months). Project Budget The project will run for 36 months. The overall estimated budget is 1000 KE (Table 3). Personal costs go to support research and management. Travel costs support the CO-EA-EI Kickoff Workshop, two CO-EA-EI Update and Planning Annual Workshops, three CO-EA-EI Methodology Workshops and participation of team members in relevant conferences. The conference costs support travel of the team members and invited participants to three Laxenburg Forums on Eurasian Economic Integration. Research and management Travel Conference TOTAL 750 KE (average 150 KE per WP1-5) 150 100 1000

Table 3: An indicative budget distribution. ANNEX I List of Selected References

A.Akhmedov, E.Bessonova, I.Cherkashin, I.Denisova, E.Grishina and D.Nekipelov (2003): WTO Accession and the Labour Market: Estimations for Russia, CEFIR Working Paper, 40.

A.Alekseev, N.Tourdyeva and K.Yudaeva (2003): Estimation of the Russia’s trade policy options with the help of the Computable General Equilibrium Model’, CEFIR Working Paper, 42.

V.Astrov (2004): The Common Economic Space agreement: origins and prospects, wiiw Monthly Report, 1, 8-14.

V.Astrov (2011): The EU and Russia: both important for Ukraine, Eastern Partnership Community, 23 May. http://www.easternpartnership.org/community/debate/eu-and-russia-both-important-ukraine

V.Astrov (2012): Russia’s WTO accession: impacts on Austria, wiiw Monthly Report, 1, 3–11.

V.Astrov, P.Havlik, O. Pindyuk (2012): Trade Integration in the CIS: Alternate Options, Economic Effects and Policy Implications for Belarus, Kazakhstan, Russia and Ukraine, wiiw Research Report 381, Vienna: Vienna Institute for International Economic Studies, wiiw.

ATF Bank (2010): Customs Union: no big inflation shock, but efforts needed to offset impact on non-resources sectors, 4, April.

R.Baldwin (1994): Towards an Integrated Europe, London: CEPR.

H.Boss and P.Havlik (1994): Slavic (dis)union: consequences for Russia, Belarus and Ukraine, Economics of Transition, Oxford University Press, 2(2), 233-254.

F.Breuss, H.Badinger (2010): The Quantitative Effects of European Post-War Economic Integration, In: M.N. Jovanovic (ed.), International Handbook of Economic Integration, Cheltenham: Edward Elgar.

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H.Broadman (2005): From Disintegration to Reintegration: Eastern Europe and the Former Soviet Union in International Trade, The World Bank, Washington DC.

M.Dabrowski and M.Maliszewska (eds.) (2011): EU Eastern Neighborhood, Berlin: Springer.

M.Dabrowski and S.Taran (2012): Is free trade with the EU good for Ukraine?, CASE Network E-Brief, 6, March.

K.De Gucht, (2011): EU-Ukraine trade negotiations: a pathway to prosperity, INTA Committee Workshop, Brussels, 20 October.

S.Djankov and C.Freund (2002): Trade Flows in the Former Soviet Union, Journal of Comparative Economics, 30(1).

A.M.Dyner (2010): Customs Union of Russia, Belarus and Kazakhstan, Bulletin of the Polish Institute of International Affairs, 102(178), July.

D.V.Efremenko (2012): Waiting for a Storm. Russian Foreign Policy in the Era of Change, Russia in Global Affairs, 2, April-June.

D.V.Efremenko (2012): New Russian Government’s Foreign Policy towards East Asia and the Pacific, The Journal of East Asian Affairs, Seoul: Institute for National Security Strategy, 26(2), Fall/Winter.

K.Elborgh-Woytek (2003): Of Openness and Distance: Trade developments in the Commonwealth of Independent States, 1993-2002, IMF Working Paper 03/207, October.

M.Emerson (2005): EU–Russia – the Four Common Spaces and the Proliferation of the Fuzzy, CEPS Policy Brief, Brussels, May.

M.Emerson (2011a): Review of the review – of the European Neighbourhood Policy, CEPS European Neighbourhood Watch, 71, May.

M.Emerson (2011b): The Timoshenko case and the rule of law in Ukraine, CEPS European Neighbourhood Watch, 73, July.

M.Emerson, E.Vinokurov (2009) Optimisation of Central Asian and Eurasian Trans-Continental Land Transport Corridors. EUCAM, Working paper 07, December.

EDB Centre for Integration Studies (2013) Monitoring of Mutual Investments. EDB Centre for Integration Studies’ Report no. 15. Cентябрь. EDB: St. Petersburg.

EDB Centre for Integration Studies (2013) The Customs Union and Neighbouring Countries: Mechanisms and Instruments of Mutually Beneficial Partnership. EDB Centre for Integration Studies’ Report no. 11. Март. EDB: St. Petersburg.

European Commission (2010): Taking stock of the European Neighbourhood Policy, Communication from the Commission to the European Parliament and the Council. Brussels: European Commission.

European Economy (2011): The EU’s Neighbouring Economies: Coping with new challenges, Occasional papers 86, DG ECFIN, November.

European Training Foundation (ETF) (2011): Labour Markets and Employability, Trends and Challenges in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine: http://www.etf.europa.eu/webatt.nsf/0/01507285AD527498C125797D0052AD32/$file/Labour%20markets%20&%20employability.pdf

European Union (2011): A new and ambitious European Neighbourhood Policy, Memo, Brussels.

J.Francois and M.Manchin (2009): Economic Impact of a Potential Free Trade Agreement (FTA) between the European Union and the Commonwealth of Independent States, Institute for International and Development Economics Discussion Paper 200908-05.

J.Francois, M.Manchin, H.Norberg, O.Pindyuk, P.Tomberger (2013): Reducing Trans-Atlantic Barriers to Trade and Investment, European Commission and CEPR..

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Š.Füle (2011): Future prospects for EU enlargement and Neighbourhood policy, Chatham House, 13 January.

Š.Füle (2012): Speech at the conference EU-Nachbarschaft-Der Arabische Frühling ein Jahr danach’, Munich, 3 February.

S.Glazyev and T.Mansurov (eds.) (2011): Regulirovanie vneshnei torgovli Tamozhennogo soyuza v ramkakh EvrAzES: uchebnoe posobie (The foreign trade regulation of the Customs Union within the framework of EurAsEC: a textbook), Moscow: Mitel Press.

S.Glazyev (2011): Rossiysko-ukrainskoe sotrudnichestvo v kontekste protsessov evraziyskoi ekonomicheskoi integratsii, Paper presented at Rodos Forum, October.

V.Gligorov, M.Holzner, M.Landesmann, S.Leitner, O.Pindyuk and H.Vidovic (2012): New Divide(s) in Europe? Current Analyses and Forecasts, wiiw Research Report 9, Vienna: Vienna Institute for International Economic Studies, wiiw.

S.Glinkina and N.Kulikova (2007): The Impact of EU Enlargement on Economic Restructuring in Russia and Future Relations between Russia and the European Union, wiiw Research Report 338, Vienna: Vienna Institute for International Economic Studies, wiiw.

H.Grabbe (2006): The EU's Transformative Power - Europeanization through Conditionality in Central and Eastern Europe, Houndsmills: Palgrave Macmillan.

C.Grant (2011): A New Neighbourhood Policy for the EU, Centre for European Reform Policy Brief, London: CERP.

R.Grinberg, P.Havlik and O.Havrylyshyn (eds.) (2008): Economic Restructuring and Integration in Eastern Europe. Experiences and Policy Implications, Baden Baden: Nomos.

C.B.Hamilton (2005): Russia’s European economic integration. Escapism and realities, Economic Systems, 29, 294–306.

P.Havlik (1991): The Collapse of the CMEA and its Consequences, Paris.

P.Havlik (2004): Russia, European Union and EU Eastward Enlargement, In: G.Hinteregger and H.G.Heinrich (eds.), Russia – Continuity and Change, Springer Vienna New York, 363-378.

P.Havlik (2008): Structural change and trade integration on EU-NIS borders’, In: R.Grinberg et al. (eds.), Economic Restructuring and Integration in Eastern Europe. Experiences and Policy Implications, Baden Baden: Nomos, 119–148.

P.Havlik (2010): European Energy Security in View of Russian Economic and Integration Prospects, wiiw Research Report 362, Vienna: Vienna Institute for International Economic Studies, wiiw.

P.Havlik, R.Stöllinger, O.Pindyuk, G.Hunya, B.Dachs, C.Lennon, M.P.Ribeiro, J.Ghosh, W.Urban, V.Astrov and E.Christie (2009): EU and BRICs: Challenges and opportunities for European competitiveness and cooperation, Industrial Policy and Economic Reform Papers, 13: http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=5586

P.Havlik et al. (2012): European Neighbourhood – Challenges and Opportunities for EU Competitiveness, wiiw Research Report 382, Vienna: Vienna Institute for International Economic Studies, wiiw.

O.Havrylyshyn (2008): Structural change in transition 1990-2005: A comparison of New Member States and selected NIS countries, In: R.Grinberg et al. (eds.) , Economic Restructuring and Integration in Eastern Europe. Experiences and Policy Implications, Baden Baden: Nomos, 17–48.

G.Hunya (2008): FDI in the new EU borderland, In: R.Grinberg et al. (2008), Economic Restructuring and Integration in Eastern Europe. Experiences and Policy Implications, Baden Baden: Nomos, 73–94.

Institute for Economic Research and Policy Consulting (2011): Ukraine’s Trade Policy Choice: Pros and cons of different regional integration options, Kiev: IERPC.

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Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine (2011): ‘Орієнтовна аналітична оцінка економічних наслідків укладення угоди про зону вільної торгівлі з ЄС або входження до Митного союзу Росії, Білорусі та Казахстану’ (Approximate analytical estimate of economic consequences of FTA with EU or joining the Customs Union of Russia, Kazakhstan, and Belarus).

M.Leonard (2011): Europe’s multipolar neighborhood, Carnegie Europe, 30 September.

A.Libman, E.Vinokurov (2012) Eurasian Economic Union: Why Now? Will It Work? Is It Enough? Whitehead Journal of Diplomacy and International Relations, 2012, 13(2):29-44

A.Libman, E.Vinokurov (2012) Holding-Together Integration: 20 Years of the Post-Soviet Integration. Basingtoke and New York: Palgrave Macmillan.

A.Libman, E.Vinokurov (2012) Regional Integration and Economic Convergence in the Post-Soviet Space: Experience of a Decade of Growth. Journal of Common Market Studies. Vol. 50. Number 1. pp. 112–128.

J.F.Linn (2004): Economic (Dis)integration Matters: The Soviet Collapse Revised, Paper prepared for the conference on ‘Transition in the CIS: Achievements and Challenges’ at the Academy for National Economy, Moscow, 13-14 September.

B.Lissovolik and Y. Lissovolik (2006): Russia and the WTO: The “Gravity” of Outsider Status, IMF Staff Papers, 53(1), 1-27.

M.Maliszewska, I.Orlova and S.Taran (2009): Deep Integration with the EU and its Likely Impact on Selected ENP Countries and Russia, CASE Network report 88, Warsaw: CASE.

O.Malynovska (2006): Caught between East and West, Ukraine struggles with its migration policy: http://www.migrationinformation.org/Profiles/display.cfm?ID=365http://www.migrationinformation.org/Profiles/display.cfm?ID=365

V.F.Medvedev, S.I.Mikhnevich, K.L.Kurylionak and E.V. Shportyuk (2004): Вступление стран с переходной экономикой во Всемирную торговую организацию: концептуальные положения (Access to the WTO of countries in transition: conceptual approach), Economy and Finance, Moscow, 3, 12-20.

C.Michalopoulos and D.G. Tarr (eds.) (1994): Trade in the New Independent States, The World Bank, Washington DC.

V.Movchan and R.Giucci (2011): Quantitative Assessment of Ukraine’s Regional Integration Options: DCFTA with European Union vs. Customs Union with Russia, Belarus and Kazakhstan, IRPC Policy Paper Series (PP/05/2011), Berlin/Kiev: IRPC.

OECD (2011): Development in Eastern Europe and the South Caucasus: Armenia, Azerbaijan, Georgia, Republic of Moldova and Ukraine, Paris: OECD Publishing.

I.Tochitskaya (2010): The Customs Union between Belarus, Kazakhstan and Russia: an overview of economic implications for Belarus, CASE Network Studies & Analyses 405, Warsaw: CASE.

I.Samson (2002): The Common European Economic Space Between Russia and the EU: An Institutional Anchor for Accelerating Russian Reform, Russian Economic Trends, 11(3).

A.Sapir, P.Aghion, G.Bertola, M.Hellwig, J.Pisani-Ferry, D.Rosati, J.Viñals, and H.Wallace (2004): An agenda for a growing Europe: The Sapir report Oxford Univ. Press.

A.Vavilov and O.Vyugin (1993): Trade Patterns After Integration into the World Economy, In: J.Williamson (ed.), Economic Consequences of Soviet Disintegration, Institute for International Economics, Washington DC.

L.Vinhas de Souza (2011): An initial estimation of the economic effects of the creation of the EurAsEC Customs Union on its members, PREM Network Economic Premise, 47, January.

E.Vinokurov, M.Jadraliyev, Y.Shcherbanin (2009). The EurAsEC Transport Corridors. EDB Sector Report no.5. April. EDB: Almaty.

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E.Vinokurov, A. Libman (2012) Eurasian and Eurasian Integration: Beyond the Post-Soviet Borders. Eurasian Integration Yearbook 2012. EDB: St. Petersburg, pp.80-96.

E.Vinokurov, A.Libman (2012) Eurasian Continental Integration. EDB: Saint-Petersburg. In Russian.

E.Vinokurov, A.Libman (2012): Eurasian integration: Challenges of transcontinental regionalism, Basingstoke: Palgrave MacMillan.

E. Vinokurov (2008) The CIS Common Electric Power Market. EDB Industry Report no.3. EDB: Almaty.

E.Vinokurov (2013): Pragmatic Eurasianism, Russia in global affairs, 2.

H.Wallace (2009): The European Union and its neighbourhood: time for a rethink, ELIAMEP Thesis, 4, May.

J.Williamson (ed.) (1993): Economic Consequences of Soviet Disintegration, Institute for International Economics, Washington DC.

World Bank (2011): Doing Business 2012: Doing Business in a More Transparent World. Washington, D.C.: World Bank.

ANNEX II Biosketches of coordinators Dmitry Efremenko Dr. Efremenko graduated from the Lomonosov Moscow State University in 1989 as historian. He completed his PhD thesis (promotion) in philosophy at the Institute for Philosophy, Russian Academy of Sciences, and simultaneously at the German-Russian College, University of Karlsruhe, Germany in 2000. He was a Fellow of the Institute for Advanced Studies on Science, Technology and Society, Graz, Austria in 2000-2001, a visiting Fellow at the Central European University, Budapest, Hungary in 2003, a guest researcher at the Universities of Potsdam and Karlsruhe, Germany in 2005, 2009. Since 2003 he has been working at the Institute for Scientific Information on Social Sciences (INION), Russian Academy of Sciences, in the capacity of a Senior Researcher of the Department of Political Science in 2003-2007, the Head of the Sociology Department since 2007 until now and the Head of the Center for Social Sciences Information since 2012 until now. In 2007 he completed his Habilitation thesis on global environmental politics in political science. His current research interests are primarily focusing on the issues of globalization and the post bipolar world order, post-Soviet economic and political integration, and analysis of Russia’s public policy.

Dmitry Korshunov

Mr. Korshunov is a project manager at the Centre for Integration Studies of the Eurasian Development Bank. He coordinates research projects focused on macroeconomic analysis and macroeconomic modeling. His main current research areas include general equilibrium modeling, building forecasting and policy analysis system for the Customs Union and Single Economic Space of Russia, Belorussia,

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and Kazakhstan, issues related to the expansion of the Customs Union and creation of the Eurasian Union. Mr. Korshunov graduated from the Lomonosov Moscow State University, Department of Mathematics and Mechanics. In 2008 he received an MBA degree at the California State University East-Bay. Till 2013 Mr. Korshunov has been employed at the Research Department of the Central Bank of the Russian Federation in the position of Chief Researcher. At the Bank of Russia he was the kea analyst who actively participated in building the forecasting and policy analysis system for Russia based on the DSGE approach (FPAS of the Bank of Russia). In 2008 Mr. Korshunov worked as a visiting scholar at the Research Department of the International Monetary Fund where he helped implementing the Global Projection Model (GPM) project.

Peter Havlik MrDI Havlik is anstaff economist at The Vienna Institute for International Economic Studies (wiiw) and a guest research scholar at the International Institute for Applied Systems Analysis (IIASA). His main current research areas cover economic transition in Central and Eastern Europe, foreign trade, competitiveness, EU integration, EU Neighbourhood, EU-Russian relations and analysis and forecasts. He is also country expert for Russia and the Newly Independent States (NIS) at wiiw. During his career he served for more than two decades as Deputy director of wiiw and participated in and coordinated various large research projects, for instance ‘Industrial Restructuring in the NIS: experiences of and lessons from the new EU Member States (INDEUNIS), funded by the EU Sixth Framework Programme (2005-2007) and ‘Energiesicherheit Europas’, a project on energy security for the OeNB Jubilee Fund (2008-2010). He has also contributed to and coordinated various chapters to the EU Competitiveness Reports (2003, 2009, 2012) and conducted a study on the Economic Development of the Black Sea Region for the Austrian Ministry of Economy in 2009. Elena Rovenskaya Dr. Rovenskaya graduated from Lomonosov Moscow State University, Faculty of Physics, in 2003. In 2006 she defended her PhD dissertation in the area of numerical algorithms in the mathematical theory of optimal control and theory of ill-posed problems. Since 2006 she has been a researcher at the Faculty of Computational Mathematics and Cybernetics, Lomonosov Moscow State University. Since 2005 she has been collaborating with the International Institute for Applied Systems Analysis (IIASA),, as of 2013 Dr. Rovenskaya has been an acting leader of IIASA’s Advanced Systems Analysis program. In 2010, 2011 she was an invited expert at the National Analytical Center for the Government of Kazakhstan, working on models for mid-term macro-economic forecasting. Dr. Rovenskaya’s research interests include application of the optimization theory and theory of dynamicaldynamic systems to complex socio-environmental systems. Sergey Tkachuk To be added